SmartFinancial in Knoxville, Tenn., has agreed to buy Entegra Financial in Franklin, N.C.
The $2.3 billion-asset SmartFinancial said in a press release Tuesday that it will pay $158.2 million in stock for the $1.7 billion-asset Entegra. The deal, which is expected to close by mid-2019, priced Entegra at 119.4% of its tangible book value.
The company will have 47 branches in Alabama, Florida, Georgia, Tennessee, North Carolina and South Carolina.
Roger Plemens, Entegra’s president and CEO, will become SmartFinancial’s president of the Carolinas. David Bright, Entegra’s chief financial officer, and Ryan Scaggs, the company’s chief operating officer, will have the same titles at SmartFinancial.
Five Entegra directors are expected to join SmartFinancial’s board.
SmartFinancial said in the release that “a significant portion” of its operations will be based in Franklin and that it will make a $1 million contribution over three years to the SmartBank Foundation to fund charities in communities served by Entegra.
“This is a historic milestone for both companies, one which we believe lays the foundation for the Southeast’s next great community banking franchise,” Billy Carroll, SmartFinancial’s president and CEO, said in the release.
“This partnership strengthens both organizations in all key areas and presents a compelling value proposition for each of our constituents," Carroll added.
The transaction is expected to generate more than 20% earnings per share accretion in the first full year. It should take a little more than two years to earn back the expected 7% dilution to SmartFinancial’s tangible book value.
SmartFinancial plans to cut roughly a quarter of Entegra's annual noninterest expenses, or about $10 million. SmartFinancial expects to incur $15 million in merger-related expenses.
Banks Street Partners and Butler Snow advised SmartFinancial. Sandler O’Neill and Hunton Andrews Kurth advised Entegra.
