Skip to main content
IN THE NEWS

Local banks to merge in $611 million deal

JANUARY 21, 2020

Local banks to merge in $611 million deal

Jan 21, 2020, 3:30pm CST

NATHAN MORGAN | NASHVILLE BUSINESS JOURNAL

Chris Holmes is CEO and president of FirstBank.

Two of Middle Tennessee’s largest local banks are combining.

On Tuesday, Nashville-based FirstBank (NYSE: FBK) announced its acquisition of Franklin-based Franklin Synergy Bank (NYSE: FSB). The cash-and-stock deal is valued at $611 million, according to a news release.

The deal is expected to close in the third quarter, with the combined bank to operate under the FirstBank brand.

This is Middle Tennessee’s largest bank deal since Pinnacle Bank spent $201.4 million for Avenue Bank in 2016. It stands to have broad ramifications in Nashville for a variety of reasons, including that FirstBank will now have the No. 1 market share in Williamson County, Nashville’s affluent Southern neighbor. Furthermore, the deal is expected to give FirstBank more than $10 billion in total assets, thereby expanding lending opportunities for its team of bankers.

According to company filings, FirstBank will have roughly $10 billion in total assets, $8.1 in total deposits and $7.2 in total loans, once the deal is finalized. FirstBank will become Greater Nashville’s sixth-largest bank, based on deposits, according to Nashville Business Journal research.

“We are very excited to announce our proposed merger with Franklin,” Chris Holmes, CEO of FirstBank, said in a statement. “Franklin [Synergy Bank] is a well-known, high-service community bank with a leading position in Williamson and Rutherford counties. We are joining forces with the leading community bank in two of the most attractive counties in our market area. We look forward to building on the strong customer relationships that Franklin has fostered.”

As part of the deal, FirstBank will establish its operations center and mortgage headquarters at Franklin Synergy’s current headquarters, the release states.

Since taking FirstBank public, Holmes hasn’t been coy about his desire to grow FirstBank’s footprint, emphasizing the bank’s desire to push into contiguous markets. Four months ago, Holmes and his team spent $51.9 million to buy their way into Southern Kentucky, snapping up Scottsville, Kentucky-based Farmers National Bank of Scottsville.

In 2018, FirstBank paid $38 million for 14 branches, many of which were in Knoxville and Chattanooga, from Atlanta-based Atlantic Capital Bancshares (Nasdaq: ACBI). And in 2017, FirstBank spent $284.2 million to snap up two banks: Knoxville’s Clayton Bank and Trust and Tullahoma’s American City Bank.

The deal follows a tumultuous few years for Franklin Synergy Bank.

Since its launch in 2007, Franklin Synergy frequently caught regulators’ attention over its fast growth and heavy concentrations in commercial real estate, something regulators have been cautious of since the Great Recession. For more than two years, the bank was under a memorandum of understanding with federal regulators that placed guidelines around its growth; those restrictions were lifted in January 2019.

Richard Herrington, the bank’s longtime CEO and founder, announced his abrupt retirement two months later. In addition, his son Kevin Herrington stepped down as the bank’s chief operating officer. They recently raised capital to help fund their next venture, which Herrington told the NBJ will use technology to help banks operate better.

In September, Myers Jones was named Herrington’s permanent replacement, after serving as interim CEO. The release did not say whether Jones will be one of the Franklin Synergy executives to stay with FirstBank following the deal’s completion.

“We believe that this transaction benefits all of our stakeholders, and we firmly believe that we will be better together,” Jones said in a statement. “Our focus will remain concentrated on our customers, and our ability to serve their needs will be stronger than ever.”

To be sure, FirstBank and Franklin Synergy joining forces isn’t the only bank deal that could disrupt the Nashville market. Brentwood-based Reliant Bank recently finalized its $37.2 million acquisition of Ashland City-based Community Bank & Trust, with officials now focused on closing out its $123.4 million purchase of Clarksville-based First Advantage Bancorp. Those deals will give Reliant roughly $3 billion in total assets.

Evercore served as Franklin Synergy’s financial advisor, while Alston & Bird LLP served as the bank’s legal adviser. J.P. Morgan Securities LLC served as FirstBank’s financial adviser, while Wachtell, Lipton, Rosen & Katz served as the Nashville bank’s legal adviser.

 

THIS SUMMER, AT LEAST DIGITAL BANKING WILL BE A BREEZE.

FirstBank’s Digital Banking’s new wave is a day at the beach! Coming July 27th, we’re rolling out a new and best in class personal Mobile Banking App and Online Banking. Click below for important information and how to videos. This upgrade does not apply to FirstBank customers in Kentucky who were among the first to merge onto the new platform.

NEW DIGITAL BANKING

CUSTOMER CONTACT CENTER 7 am – 6 pm CST Monday – Friday
7 am – 4 pm CST Saturday Call 1-800-413-4211
CONTACT A LOCAL BRANCH First Locator
WHAT ARE WE UP TO? We’ve got a lot to share as we grow. Latest news, events and more. Go To FirstNews >