Home BancShares Inc. of Conway (NYSE: HOMB), the parent company of Centennial Bank, announced Monday the acquisition of Mountain Commerce Bancorp Inc. of Knoxville, Tennessee, in an all-stock transaction worth about $150 million.
Mountain Commerce, which has 7 branches, has assets of $1.8 billion and deposits of $1.59 billion. The bank ranks 20th in deposit market share in Tennessee.
The deal will increase Home Bancshares’ assets to about $25 billion and increase its deposits to $19.2 billion, making it one of the 75 largest banks headquartered in the U.S. by deposit market share, the bank said.
Home Bancshares Chairman John Allison said the deal will give the bank access to desirable markets in Tennessee, including Nashville, Knoxville and Johnson City.
Home Bancshares paid an implied share price of $23.51 with an implied total transaction value of $150.1 million.
Mountain Commerce founder and CEO Bill Edwards will lead the Tennessee portion of Home Bancshares. Edwards said the bank focuses on professional markets, including doctors, lawyers and accountants but said it has also not shied away from real estate.
Speaking from Mountain Commerce’s headquarters in Knoxville on Monday morning, Allison did not rule out additional acquisitions in Tennessee, which he said was one of the top markets along with Florida and Texas. Allison noted Home Bancshares will now have a presence in all three states.
Allison said his eye had been on Mountain Commerce for a while but he waited to pursue the transaction until there was a resolution related to legal matters involving Home Bancshares’ 2022 acquisition of Happy Bancshares in Texas.
Allison said he expects the Mountain Commerce acquisition to close within 90 days and that the additional capital will allow the former Mountain Commerce bank to pursue bigger loans.
Allison said the deal would be triple accretive for the company, resulting in increased earnings per share, book value per share and tangible book value per share.
Shares of Home BancShares opened at $28.43 Monday morning and rose less than 1%. Over the past 12 months, shares were down about 7.7%.
Shares of Mountain Commerce (OTCQX: MCBI) climbed 4% Monday morning to $23.40. Over the past 12 months, shares were up 10.12%.
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