KNOXVILLE, Tenn. – December 12, 2017 – SmartFinancial, Inc., parent company of SmartBank (“SmartFinancial”) (NASDAQ: SMBK), and Tennessee Bancshares, Inc. (“Tennessee Bancshares”), parent company of Southern Community Bank (“Southern Community”), jointly announced today the signing of a definitive merger agreement pursuant to which SmartFinancial will acquire Tennessee Bancshares followed by Southern Community merging into SmartBank. Upon completion of the transaction, the combined company is expected to have assets of approximately $2.0 billion.
“This is another big step for SmartBank in becoming the Southeast’s next great community banking franchise. We are excited to partner with Southern Community and look forward to serving an expanded footprint in our newest markets in Murfreesboro, Huntsville and Tullahoma,” said SmartBank President and CEO, Billy Carroll. “The opportunities that exist in these thriving markets combined with Southern Community’s strong history of dedicated client service and unwavering commitment to its communities, affirm that this transaction will produce a successful partnership.”
According to Southern Community’s President and CEO, Bill Yoder, this partnership is a perfect fit. “We could not have picked a better partner from a community banking perspective. Because of our similar cultures, SmartBank’s core values align perfectly with Southern Community’s values, with a strong emphasis on client service and commitment to the communities we serve.”
“Southern Community Bank sees pairing with such a forward growing company as SmartBank as an ideal opportunity,” said Southern Community’s Chairman of the Board, Theresa Devlin.
“Our customers will benefit immediately from this partnership, as we enhance our ability to provide each of them with additional resources and the best banking options available,” added Yoder.
Established in 2007, SmartBank has more than $1.6 billion in assets and operates 22 branches and three loan production offices spanning East Tennessee, Tuscaloosa and Southwest Alabama, and the Florida Panhandle. This marks the company’s fifth acquisition in the past five years.
Southern Community was founded in 2005 and is headquartered in Tullahoma, TN. The bank has three Tennessee locations in Tullahoma, Murfreesboro, and Chattanooga, as well as one location in Huntsville, AL.
The acquisition is subject to customary closing conditions, including the approval of Tennessee Bancshares’ shareholders and the receipt of all necessary regulatory approvals, and is expected to be completed in the second quarter of 2018.
The merger agreement provides for the merger of Tennessee Bancshares with and into SmartFinancial, with SmartFinancial to be the surviving corporation. SmartBank and Southern Community have entered into a separate agreement providing for the merger of Southern Community with and into SmartBank immediately following the merger of SmartFinancial and Tennessee Bancshares, with SmartBank to be the surviving bank.
Under the terms of the merger agreement, shareholders of Tennessee Bancshares will receive 0.8065 shares of SmartFinancial common stock for each share of Tennessee Bancshares common stock, which equates to an aggregate announced transaction value of approximately $31.8 million based on the closing price for SmartFinancial’s common stock of $21.79 on December 11, 2017. Additionally, subject to the satisfaction of certain conditions, the merger agreement provides that Tennessee Bancshares may pay, immediately prior to the closing of the transaction, a one-time special cash dividend of up to $0.70 per share on the Tennessee Bancshares common stock, or up to approximately $1.27 million in the aggregate, based on 1,809,282 shares of Tennessee Bancshares common stock outstanding as of December 11, 2017.
The parties anticipate that, following the merger, Bill Yoder will assume the role of Chief Banking Officer for SmartBank and Clifton Miller, who currently serves on the Tennessee Bancshares and Southern Community boards of directors, will join the SmartFinancial and SmartBank boards of directors.
Banks Street Partners, LLC served as financial advisor to SmartFinancial, while the law firm Butler Snow LLP served as legal counsel. Olsen Palmer LLC served as financial advisor to Tennessee Bancshares, with the law firm Waller Lansden Dortch & Davis, LLP serving as legal counsel.
About SmartFinancial, Inc.
SmartFinancial, Inc., with assets in excess of $1.6 billion, is a publicly traded bank holding company for SmartBank based in Knoxville, TN. SmartBank is a full-service commercial bank founded in 2007, with 22 branches and three loan production offices spanning East Tennessee, Tuscaloosa and Southwest Alabama, and the Florida Panhandle. Recruiting the best people, delivering exceptional client service, strategic branching, and a disciplined approach to lending have contributed to the company’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.
About Tennessee Bancshares, Inc.
Tennessee Bancshares, Inc. is the bank holding company for Southern Community Bank, a Tennessee-chartered commercial bank headquartered in Tullahoma, Tennessee. Southern Community has offices in Tullahoma, Murfreesboro, and Chattanooga, TN, and Huntsville, AL. As of September 30, 2017, Southern Community had total assets of approximately $244 million, deposits of approximately $210 million, and loans of approximately $196 million.
