CapStar Financial, a Tennessee-based bank holding company, has agreed to acquire FCB and Bank of Waynesboro (BOW) in stock-cum-cash deals with a combined value of $85.1m.
The transaction will see the merger of CapStar Financial’s CapStar Bank, FCB’s fully-owned subsidiary – First National Bank of Manchester (FNBM) and The Bank of Waynesboro. The surviving entity, post-merger, will be CapStar Bank, which will expand its consolidated assets to nearly $2.5bn.
Also part of the deal is FCB’s merger with CapStar Financial.
Both FCB and Bank of Waynesboro, which are also based in Tennessee, had total combined assets of $467m, as of 31 December 2019.
CapStar president and CEO Timothy Schools said: “This strategic partnership will mutually benefit each of the companies’ employees, customers, and shareholders.
“Importantly, the combination continues to strengthen CapStar’s funding capabilities while providing more granular and higher-yielding loan opportunities; deepens our local banking efforts in dynamic Middle Tennessee offering access into the fast-growing Rutherford County market; and creates additional scale allowing us to serve larger relationships, diversify our risks, and increase shareholder value and liquidity.”
The First National Bank of Manchester, which was chartered in 1900, holds assets of $292m. The bank operates four locations in the Coffee, Cannon, and Rutherford counties.
The Bank of Waynesboro has been operating since 1904 and has assets of $175m. The bank, currently, operates five locations across the Lawrence and Wayne counties.
CapStar Bank with operations in 13 locations in seven Tennessee counties has assets of $2.03bn.
Terms of the merger between CapStar Bank, FNBM and Bank of Waynesboro
As per the terms of the merger, shareholders of FCB and Bank of Waynesboro will be issued 3,634,218 CapStar’s shares plus $26.4m in cash in exchange of each of all their shares in the respective banking companies.
First National Bank of Manchester president and CEO Timothy Spry said: “In their recent partnership with Athens Federal, CapStar demonstrated a deep commitment to their employees, customers, and local community.
“We believe this combination will better align our resources, expand our product offerings and technology solutions, and enhance our financial strength allowing us to better serve our markets.”
Subject to regulatory and shareholder approvals and also fulfilment of certain other customary closing conditions, the transaction is expected to be completed either in late second quarter or early third quarter of this year.
