Combination creates the premier community
bank in Tennessee
FB Financial Corporation (NYSE: FBK), parent company of
FirstBank, and Franklin Financial Network, Inc. (NYSE: FSB), parent
company of Franklin Synergy Bank, jointly announced their entry
into a definitive merger agreement pursuant to which Franklin will
be merged with and into FB Financial.
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Franklin is headquartered in Franklin, Tennessee with 15
branches throughout Williamson, Rutherford and Davidson counties in
the Nashville MSA. Franklin is the leading community bank in its
primary markets, demonstrated by its strong market shares in
Williamson and Rutherford counties. Franklin reported total assets
of $3.9 billion, loans of $2.8 billion and deposits of $3.2 billion
as of December 31, 2019.
The combination significantly enhances FirstBank’s operations in
the Nashville MSA, specifically in the attractive Williamson and
Rutherford counties where Franklin has a strong community presence.
Pro forma for the transaction, FirstBank’s deposit market share
will be #6 in the Nashville MSA, #1 in Williamson County and #2 in
Rutherford County.
FB Financial’s President and CEO Christopher T. Holmes
commented, “We are very excited to announce our proposed merger
with Franklin. Franklin 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.”
Franklin’s CEO, J. Myers Jones, III, commented, “Our team is
excited to join the FB Financial family. We believe that this
transaction benefits all of our stakeholders, and we firmly believe
that we will be better together. Our focus will remain concentrated
on our customers, and our ability to serve their needs will be
stronger than ever.”
As part of the transaction, key Franklin executives have agreed
to remain with FB Financial following the closing and have entered
into employment arrangements that will become effective upon the
completion of the merger with FB Financial.
Following the transaction, FB Financial will establish a primary
operations center and its mortgage headquarters for the combined
company at Franklin’s existing corporate headquarters in downtown
Franklin, Tennessee.
Following the close of the transaction, three members of
Franklin’s board of directors will be appointed to the FB Financial
board of directors.
According to the terms of the merger agreement, Franklin
shareholders will receive 0.9650 shares of FB Financial common
stock and $2.00 in cash for each share of Franklin stock. Based on
FB Financial’s closing price of $38.80 per share as of January 17,
2019, the implied transaction value is approximately $611 million
in the aggregate or $39.44 per share.
The transaction is expected to be approximately 10% accretive to
FB Financial’s earnings per share on a fully-phased in basis and
neutral to FB Financial’s tangible book value per share at the
close of the transaction. These strong return metrics include a
substantial loan mark and achievable cost savings assumptions as
well as plans to reduce the risk of Franklin’s balance sheet by
exiting approximately $430 million of shared national credits and
non-strategic healthcare and corporate loans and paying down
non-core funding with the net proceeds.
Additionally, Mr. Holmes commented, “The combination provides FB
Financial meaningful earnings accretion, while remaining neutral on
tangible book value per share. As in every combination, protecting
the balance sheet is paramount, so these financial returns come
after taking a conservative approach to the balance sheet; we are
assuming a 3.9% mark to loans. We are also assuming 30% cost
savings, even though we have significant overlap in our respective
branch networks. We will accelerate Franklin’s strategy of exiting
non-strategic assets and growing the core community bank. The
combined franchise will be well positioned to build on our strong
existing customer relationships and grow our greater Nashville area
presence.”
The merger agreement has been unanimously approved by both
companies’ boards of directors. The merger is expected to close in
the third quarter of 2020 and is subject to regulatory approvals,
approval by FB Financial’s and Franklin’s shareholders and other
customary closing conditions. James W. Ayers, FB Financial’s
Executive Chairman and 44% owner of FB Financial, has entered into
a customary voting agreement to vote his shares in favor of the
transaction. Additionally, each member of Franklin’s board of
directors has entered into similar voting agreements.
J.P. Morgan Securities LLC served as financial advisor to FB
Financial Corporation, and Wachtell, Lipton, Rosen & Katz
served as legal advisor. Evercore served as financial advisor to
Franklin Financial Network, Inc., and Alston & Bird LLP served
as legal advisor.
In addition to the information contained within this press
release, an Investor Presentation has been posted to FB Financial’s
website (www.firstbankonline.com) and Franklin’s website
(www.franklinsynergybank.com) and has been furnished as an exhibit
to a Form 8-K filed by each company with the Securities and
Exchange Commission.
WEBCAST AND CONFERENCE CALL INFORMATION
FB Financial Corporation will host a conference call to discuss
the announced merger with Franklin Financial Network, Inc. and the
company’s financial results at 5:00 p.m. CT on Tuesday, January 21,
2020, and the conference call will be broadcast live over the
internet at https://www.webcaster4.com/Webcast/Page/1631/32670. An
online replay will be available approximately an hour following the
conclusion of the live broadcast.
ABOUT FB FINANCIAL CORPORATION
FB Financial Corporation (NYSE: FBK) is a bank holding company
headquartered in Nashville, Tennessee. FB Financial operates
through its wholly owned banking subsidiary, FirstBank, the third
largest Tennessee-headquartered bank, with 68 full-service bank
branches across Tennessee, North Alabama and North Georgia, and
mortgage offices across the Southeast. FirstBank serves five of the
largest metropolitan markets in Tennessee and has approximately
$6.1 billion in total assets.
ABOUT FRANKLIN FINANCIAL NETWORK, INC.
Franklin Financial Network, Inc. (NYSE: FSB) is a financial
holding company headquartered in Franklin, Tennessee. The company's
wholly owned bank subsidiary, Franklin Synergy Bank, a
Tennessee-chartered commercial bank founded in November 2007 and a
member of the Federal Reserve System, provides a full range of
banking and related financial services with a focus on service to
small businesses, corporate entities, local governments and
individuals. With consolidated total assets of $3.9 billion at
December 31, 2019, the Bank currently operates through 15 branches
in the growing Williamson, Rutherford and Davidson counties and one
loan production/deposit production office in Wilson County, all
within the Nashville metropolitan statistical area.
IMPORTANT INFORMATION FOR SHAREHOLDERS AND INVESTORS
In connection with the proposed merger, FB Financial will file a
registration statement on Form S-4 with the Securities and Exchange
Commission (“SEC”). The registration statement will contain the
joint proxy statement of Franklin Financial Network, Inc.
(“Franklin”) and FB Financial to be sent to the FB Financial and
Franklin shareholders seeking their approvals in connection with
the merger and the issuance of FB Financial common stock in the
merger. The registration statement will also contain the prospectus
of FB Financial to register the shares of FB Financial common stock
to be issued in connection with the merger. A definitive joint
proxy statement/prospectus will also be provided to FB Financial
and Franklin shareholders as required by applicable law. Investors
and shareholders are encouraged to read the registration statement,
including the joint proxy statement/prospectus that will be part of
the registration statement, as well as any other relevant documents
filed by FB Financial and Franklin with the SEC, including any
amendments or supplements to the registration statement and other
documents filed with the SEC, because they will contain important
information about the proposed merger, Franklin, and FB Financial.
The registration statement and other documents filed with the SEC
may be obtained for free on the SEC’s website (www.sec.gov). The
definitive proxy statement/prospectus will also be made available
for free by contacting FB Financial Corporation Investor Relations
at (615) 564-1212 or investors@firstbankonline.com, or by
contacting Franklin Investor Relations at (615) 236-8327 or
investors@franklinsynergy.com. This communication does not
constitute an offer to sell, the solicitation of an offer to sell
or the solicitation of an offer to buy any securities, or the
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction.
PARTICIPANTS IN THE SOLICITATION
FB Financial, Franklin, and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from FB Financial and Franklin
shareholders in connection with the proposed merger under the rules
of the SEC. Information about the directors and executive officers
of FB Financial may be found in the definitive proxy statement for
FB Financial’s 2019 annual meeting of shareholders, filed with the
SEC by FB Financial on April 16, 2019, and other documents
subsequently filed by FB Financial with the SEC. Information about
the directors and executive officers of Franklin may be found in
the definitive proxy statement for Franklin’s 2019 annual meeting
of shareholders, filed with the SEC by Franklin on April 12, 2019,
and other documents subsequently filed by Franklin with the SEC.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the joint proxy statement/prospectus when it becomes available.
Free copies of these documents may be obtained as described in the
paragraph above.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this communication may
constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These
forward-looking statements include, without limitation, statements
relating to the timing, benefits, costs, and synergies of the
proposed merger with Franklin (which we refer to as the “Franklin
merger”), and FB Financial’s and Franklin’s future plans, results,
strategies, and expectations. These statements can generally be
identified by the use of the words and phrases “may,” “will,”
“should,” “could,” “would,” “goal,” “plan,” “potential,”
“estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,”
“target,” “aim,” “predict,” “continue,” “seek,” “projection,” and
other variations of such words and phrases and similar expressions.
These forward-looking statements are not historical facts, and are
based upon current expectations, estimates, and projections, many
of which, by their nature, are inherently uncertain and beyond FB
Financial’s or Franklin’s control. The inclusion of these
forward-looking statements should not be regarded as a
representation by FB Financial, Franklin or any other person that
such expectations, estimates, and projections will be achieved.
Accordingly, FB Financial and Franklin caution shareholders and
investors that any such forward-looking statements are not
guarantees of future performance and are subject to risks,
assumptions, and uncertainties that are difficult to predict.
Actual results may prove to be materially different from the
results expressed or implied by the forward-looking statements. A
number of factors could cause actual results to differ materially
from those contemplated by the forward-looking statements
including, without limitation, (1) the risk that the cost savings
and any revenue synergies from the proposed Franklin merger or
another acquisition may not be realized or may take longer than
anticipated to be realized, (2) disruption from the proposed
Franklin merger with customer, supplier, or employee relationships,
(3) the occurrence of any event, change, or other circumstances
that could give rise to the termination of the merger agreement
with Franklin, (4) the failure to obtain necessary regulatory
approvals for the Franklin merger, (5) the failure to obtain the
approval of FB Financial and Franklin’s shareholders in connection
with the Franklin merger, (6) the possibility that the costs, fees,
expenses, and charges related to the Franklin merger may be greater
than anticipated, including as a result of unexpected or unknown
factors, events, or liabilities, (7) the failure of the conditions
to the Franklin merger to be satisfied, (8) the risks related to
the integration of the combined businesses (Franklin, as well as FB
Financial’s pending acquisition of FNB Financial Corp. and any
future acquisitions), including the risk that the integration will
be materially delayed or will be more costly or difficult than
expected, (9) the diversion of management time on merger-related
issues, (10) the ability of FB Financial to effectively manage the
larger and more complex operations of the combined company
following the Franklin merger, (11) the risks associated with FB
Financial’s pursuit of future acquisitions, (12) the risk of
expansion into new geographic or product markets, (13) reputational
risk and the reaction of the parties’ customers to the Franklin
merger, (14) FB Financial’s ability to successfully execute its
various business strategies, including its ability to execute on
potential acquisition opportunities, (15) the risk of potential
litigation or regulatory action related to the Franklin merger, and
(16) general competitive, economic, political, and market
conditions. Further information regarding FB Financial, Franklin
and factors which could affect the forward-looking statements
contained herein can be found in FB Financial's Annual Report on
Form 10-K for the fiscal year ended December 31, 2018, its
Quarterly Reports on Form 10-Q for the three-month periods ended
March 31, 2019, June 30, 2019 and September 30, 2019, and its other
filings with the SEC, and in Franklin's Annual Report on Form 10-K
for the fiscal year ended December 31, 2018, its Quarterly Reports
on Form 10-Q for the three-month periods ended March 31, 2019, June
30, 2019 and September 30, 2019, and its other filings with the
SEC.
Many of these factors are beyond FB Financial’s and Franklin’s
ability to control or predict. If one or more events related to
these or other risks or uncertainties materialize, or if the
underlying assumptions prove to be incorrect, actual results may
differ materially from the forward-looking statements. Accordingly,
shareholders and investors should not place undue reliance on any
such forward-looking statements. Any forward-looking statement
speaks only as of the date of this communication, and neither FB
Financial nor Franklin undertakes any obligation to publicly update
or review any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required
by law. New risks and uncertainties may emerge from time to time,
and it is not possible for FB Financial or Franklin to predict
their occurrence or how they will affect FB Financial or
Franklin.
FB Financial and Franklin qualify all of their forward-looking
statements by these cautionary statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20200121006058/en/
MEDIA CONTACT: Jeanie M. Rittenberry 615-313-8328
jrittenberry@firstbankonline.com www.firstbankonline.com
FINANCIAL CONTACT: James R. Gordon 615-564-1212
jgordon@firstbankonline.com investorrelations@firstbankonline.com
Franklin: MEDIA CONTACT: Mandy Garland Director of IR
& Corporate Communications (615) 236-8327
mandy.garland@franklinsynergy.com FINANCIAL CONTACT: Chris
Black Chief Financial Officer (615) 721-6096
chris.black@franklinsynergy.com
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