Skyline Bankshares, Inc. (“Skyline”) (OTCQX: SLBK), the holding company of Skyline National Bank, and Johnson County Bank announced today that they have entered into a definitive agreement to combine their companies. Under the terms of the agreement, Johnson County Bank will merge with and into Skyline National Bank in an all cash transaction valued at $25.0 million.
The combined organization is expected to have 28 banking locations, assets of nearly $1.2 billion, deposits of over $1.0 billion and shareholders’ equity of approximately $89.1 million at closing.
“We are happy to announce our entrance into Tennessee through this partnership with Johnson County Bank. This strategic move is not only rooted in our shared values but also aligns with our growth objectives, presenting an exceptional opportunity to enhance our service to the local communities. We are excited to bring our commitment to excellence and dedication to the businesses and people of Johnson County, Tennessee. Together, we look forward to creating a positive impact in Tennessee while continuing to offer an unmatched customer experience in our existing markets,” said Blake Edwards, President and CEO of Skyline.
Christopher Reece, CEO of Johnson County Bank, said this about the opportunity: “We are thrilled to announce our decision to join forces with Skyline. As a local community bank focused on the markets in which we operate, we have always prioritized values that align closely with those of Skyline. This strategic move allows us to offer our customers an even wider array of products and services, ensuring that their needs are met comprehensively. We believe that this partnership is a good fit not only for our customers but also for our dedicated employees and the communities we proudly serve. Together, we look forward to serving the Johnson County area.”
According to the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, the transaction is expected to be immediately accretive to Skyline’s estimated earnings before one-time costs, with an expected tangible book value earnback of less than 2.5 years, and an internal rate of return expected to exceed internal thresholds. Furthermore, one Johnson County Bank director, Christoper Reece, will be invited to join the Skyline Board of Directors.
The combination is subject to approval by Johnson County Bank’s shareholders, banking regulators and other customary closing conditions. The transaction is expected to be completed during the second half of 2024.
Raymond James & Associates, Inc. acted as financial advisor and has provided a fairness opinion to Skyline, and Williams Mullen acted as its legal advisor in the transaction. Olsen Palmer LLC acted as financial advisor to Johnson County Bank and Luse Gorman, PC acted as its legal advisor in the transaction.
