Home BancShares Inc., based in Conway, announced on Monday that it is set to acquire Mountain Commerce Bancorp, located in Knoxville, Tennessee. This all-stock deal is estimated to be worth around $150 million.
Mountain Commerce operates seven branches and has assets totaling $1.8 billion along with $1.59 billion in deposits. It currently holds the 20th position for deposit market share in Tennessee.
With this acquisition, Home BancShares will see its total assets rise to roughly $25 billion and deposits to about $19.2 billion, positioning it among the 75 largest banks in the United States based on deposit market share.
John Allison, Chairman of Home Bancshares, mentioned that this partnership will open up access to key markets in Tennessee, such as Nashville, Knoxville, and Johnson City.
The implied share price for Mountain Commerce was set at $23.51, leading to a total implied transaction amount of approximately $150.1 million.
Bill Edwards, who is the founder and CEO of Mountain Commerce, will oversee the operations in Tennessee for Home Bancshares. He indicated that the bank aims to cater to a professional clientele, including doctors, lawyers, and accountants, while still engaging in the real estate sector.
During a Monday morning conversation from Mountain Commerce’s headquarters, Allison hinted at the possibility of further acquisitions in Tennessee, identifying it as a key market alongside Florida and Texas. He emphasized that Home Bancshares plans to establish a presence across all three states.
Allison had been keeping an eye on Mountain Commerce for some time but chose to wait until resolving legal complications linked to Home Bancshares’ previous acquisition of Happy Bancshares in Texas before moving forward.
He anticipates the acquisition of Mountain Commerce to finalize within 90 days, suggesting that the increased capital will enable the former Mountain Commerce Bank to consider larger loans.
According to Allison, this transaction is expected to enhance three key financial metrics: earnings per share, book value per share, and visible book value per share.
On Monday morning, Home Bancshares stock opened at $28.43, showing a slight increase of less than 1%. Over the past year, the stock has seen a decline of about 7.7%.
In contrast, Mountain Commerce stock experienced a 4% rise to $23.40 on Monday morning, reflecting a 10.12% increase over the past year.
