Reliant Bancorp, Inc., the parent company for Reliant Bank, announced that it has entered into a definitive agreement to acquire First Advantage Bancorp, the parent company for First Advantage Bank (“FAB”), located in Clarksville, Tennessee.
The agreement provides for a cash and stock transaction valued at approximately $123.4 million, or $30.67 per share of FABK common stock, based on the closing price for Reliant common stock of $23.65 per share on October 22, 2019. Inclusive of its pending acquisition of Tennessee Community Bank Holdings, Inc., Reliant expects the acquisition to be approximately 18% accretive to fully diluted earnings per common share in 2021, assuming full achievement of anticipated cost savings, while tangible book value dilution is expected to be earned back in 3 years.
The combined company is expected to have total consolidated assets of approximately $3.0 billion, deposits of approximately $2.5 billion, and loans of approximately $2.3 billion, and will operate 30 full-service branches and a loan production office in Middle and East Tennessee, after consummation of the pending TCB Holdings Transaction and the FABK acquisition. The transaction is expected to position Reliant as the second largest bank in Montgomery County, Tennessee, and the third largest bank in the Clarksville, TN-KY Metropolitan Statistical Area (the “Clarksville MSA”), based upon most recent FDIC deposit market share data. Further, Reliant plans to expand capabilities for its customers and diversify its business mix with the addition of FAB’s specialty lending business. FAB’s specialty lending business provides loans to consumers for the purchase of manufactured homes, primarily in the Southeastern United States.
DeVan Ard, Jr., Chairman, President, and Chief Executive Officer of Reliant, commented, “We are very excited about the growth opportunity the proposed merger with First Advantage Bancorp presents. Our companies share similar values, and our partnership will reinforce the foundation for an extraordinary financial services company whose focus is the delivery of exceptional experiences to our customers, employees, and the communities in which we serve. This transaction satisfies our strategic and financial criteria for a successful acquisition. We are gaining a strong presence in the attractive Clarksville MSA, anticipate double-digit EPS accretion, and expect to benefit from the strong growth and fantastic asset quality trends that First Advantage Bank has demonstrated.”
“I believe the partnership with Reliant Bank is an excellent fit for our shareholders, customers, and employees,” said Earl O. Bradley III, Chief Executive Officer of First Advantage. “The combination of our companies will better align our resources, enhance our financial strength, and expand our product offerings and technology solutions, all while allowing us to remain actively involved in our communities.”
The definitive agreement provides for the merger of FABK with and into Reliant, with Reliant to be the surviving company. Under the terms of the definitive agreement, shareholders of FABK will receive 1.17 shares of Reliant common stock and $3.00 cash (subject to adjustment under certain circumstances provided for in the definitive agreement) in exchange for each share of FABK common stock. The definitive agreement has been approved by the board of directors of both Reliant and FABK. The parties currently expect to consummate the transaction in the second quarter of 2020, subject to the receipt of required regulatory and shareholder approvals, as well as the satisfaction of certain other customary closing conditions. Reliant Bank and FAB have entered into a separate bank merger agreement providing for the merger of FAB with and into Reliant Bank following the merger of Reliant and FABK. The combined bank will operate as Reliant Bank. Current FABK board members William Lawson Mabry and Michael E. Wallace are expected to join Reliant’s board of directors upon completion of the transaction.
Piper Jaffray & Co. served as financial advisor and Butler Snow LLP served as legal counsel to Reliant. Raymond James & Associates, Inc. served as financial advisor and Kilpatrick Townsend & Stockton LLP served as legal counsel to FABK.