In Tennessee, Brentwood-based Reliant Bancorp Inc. agreed to acquire Clarksville-based First Advantage Bancorp in a cash-and-stock transaction valued at $123.4 million.
Under the terms of the deal, First Advantage Bancorp shareholders will receive 1.17 shares of Reliant Bancorp common stock and $3.00 cash for each common share they own. The deal values First Advantage Bancorp common shares at $30.67 apiece.
First Advantage Bank will merge with Reliant Bank following the closing of the deal, which is expected in the second quarter of 2020. Current First Advantage Bancorp board members William Lawson Mabry and Michael Wallace are expected to join Reliant Bancorp's board.
The combined company will have total consolidated assets of about $3 billion, deposits of about $2.5 billion and loans of roughly $2.3 billion. It will operate 30 full-service branches and a loan production office in Middle and East Tennessee after consummation of the deal and another pending acquisition of Tennessee Community Bank Holdings Inc.
S&P Global Market Intelligence calculates the deal is 153.37% of common equity and of tangible common equity and 17.19x earnings, on an aggregate basis. The deal value is 16.92% of assets, 20.56% of deposits, and the tangible book premium to core deposits ratio is 10.03%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Southeast region between Oct. 23, 2018, and Oct. 23, 2019, averaged 155.17% of book and 163.44% of tangible book and had a median of 17.07x last-12-months earnings, on an aggregate basis.
The deal will enable Reliant Bancorp to expand in Williamson County, Tenn., by two branches to be ranked fifth with an 8.5% share of approximately $10.34 billion in total market deposits. It will also expand in Davidson County, Tenn., by one branch to be ranked No. 22 with a 0.26% share of approximately $36.94 billion in total market deposits.
Reliant Bancorp will enter Montgomery County, Tenn., with five branches to be ranked second with a 15.36% share of approximately $2.74 billion in total market deposits due to the deal. The company will also enter Knox County, Tenn., with one branch to be ranked No. 31 with approximately $12.46 billion in total market deposits.
Inclusive of its pending acquisition of Tennessee Community Bank Holdings, Reliant Bancorp expects the deal to be about 18% accretive to its 2021 EPS, assuming full achievement of anticipated cost savings, while tangible book value dilution is expected to be earned back in three years.
Piper Jaffray & Co. served as financial adviser and Butler Snow LLP served as legal counsel to Reliant Bancorp. Raymond James & Associates Inc. served as financial adviser and Kilpatrick Townsend & Stockton LLP served as legal counsel to First Advantage Bancorp in connection with the deal.