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Reliant Bancorp to buy Tennessee Community Bank Holdings in $37.2M deal

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Reliant Bancorp to buy Tennessee Community Bank Holdings in $37.2M deal

Brentwood, Tenn.-based Reliant Bancorp Inc. agreed to acquire Ashland City, Tenn.-based Tennessee Community Bank Holdings Inc. in a cash-and-stock deal valued at around $37.2 million.

Under the terms of the deal, Tennessee Community Bank Holdings shareholders will receive 0.769 of a Reliant Bancorp common share, subject to adjustment, and $17.13 in cash in exchange for each Tennessee Community Bank Holdings share held. The 24,450 outstanding options to acquire Tennessee Community Bank Holdings common stock are to be cashed out, which equates to additional consideration of about $400,000.

Reliant Bank will also acquire Tennessee Community Bank Holdings unit Community Bank & Trust as part of the deal.

The transaction is expected to close in the first quarter of 2020. Reliant Bancorp expects the deal to be about 10.5% and 12.5% accretive to earnings per common share in 2020 and 2021, respectively, and 5.3% dilutive to tangible book value per share at closing with an earnback period of less than three years.

S&P Global Market Intelligence calculates the deal is 139.6% of common equity and 139.6% of tangible common equity and 14.7x earnings, on an aggregate basis. The deal value is 14.80% of assets, 17.89% of deposits and the tangible book premium to core deposits ratio is 6.54%.

S&P Global Market Intelligence valuations for bank and thrift targets in the Southeast region between Sept. 16, 2018, and Sept. 16, 2019, averaged 159.18% of book and 170.33% of tangible book and had a median of 18.09x last-12-months earnings, on an aggregate basis.

Reliant Bancorp will enter Cheatham County, Tenn., with four branches to be ranked first with a 34.5% share of approximately $522.89 million in total market deposits. The deal will also enable the company to expand in Robertson County, Tenn., by one branch to be ranked fourth with a 15.26% share of approximately $922.82 million in total market deposits.

As of June 30, Reliant Bancorp had about $1.8 billion in total consolidated assets, about $1.3 billion in gross loans and approximately $1.6 billion in deposits, while Tennessee Community Bank Holdings had about $251 million in total consolidated assets, approximately $169 million in gross loans and about $208 million in deposits, according to a news release.

On a pro forma basis as of June 30, the combined company would have assets of about $2.0 billion, gross loans of approximately $1.5 billion and deposits of approximately $1.8 billion.

Hovde Group LLC was financial adviser and Butler Snow LLP was legal counsel to Reliant Bancorp. Olsen Palmer LLC was financial adviser and Bass Berry & Sims PLC was legal counsel to Tennessee Community Bank Holdings.

To use S&P Global Market Intelligence's branch analytics tools to compare market overlap, click here. To create custom maps, click here.

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