Jefferson Federal acquired by Asheville’s HomeTrust
The Jefferson Federal Main Branch located on Evans Avenue in Morristown.
HomeTrust Bancshares Inc. and Jefferson Bancshares Inc. jointly announced on Jan. 23 the signing of a definitive agreement under which HomeTrust will acquire Jefferson. Upon the completion of the transaction, the combined company is expected to have approximately $2.1 billion in assets.
“We are enthusiastic to enter the East Tennessee market by connecting with an institution sharing our core values,” said HomeTrust President and CEO Dana Stonestreet.” Both banking organizations are dedicated to providing superior customer service, placing value on their employees and focusing continually on creating shareholder value.
“We are operating in an increasingly complex regulatory environment where scale and efficiency of operations is paramount,” Stonestreet said. “We believe that strategically aligning with like-minded regional community banking institutions, such as Jefferson, will allow the HomeTrust franchise to achieve greater economies of scale and better position us to forge additional partnerships by augmenting our already strong capital base.”
“We eagerly anticipate the merger of Jefferson into HomeTrust, as our companies share similar business and cultural philosophies,” Jefferson President and CEO Anderson Smith said. “With the resources of Jefferson and HomeTrust, the combined institution will be empowered to better serve its customers and markets by offering an expanded and more competitive product and service menu.
“Additionally, I look forward to serving as the East Tennessee Market President for HomeTrust and as a member of the HomeTrust Board of Directors,” Smith said.
Established in 1963, Jefferson Federal Bank is headquartered in Morristown. Its holding company, Jefferson Bancshares Inc., has more than $498 million in combined assets. Jefferson operates a total of 12 banking facilities in Hamblen County, Knoxville and the greater Johnson City and Kingsport areas (the Tri-Cities region).
The merger agreement has been unanimously approved by the boards of directors of both companies. The transaction is anticipated to close in the second calendar quarter of 2014, subject to customary closing conditions, including regulatory approvals and Jefferson shareholder approval.
Under the terms of the agreement, Jefferson shareholders will receive a total of $8 per share in merger consideration consisting of $4 in cash, plus $4 in HomeTrust common stock.
This represents approximately $51.2 million of aggregate transaction consideration. The number of HomeTrust shares to be issued will be determined based on HomeTrust’s average closing stock price during the 10 trading days ending on the fifth trading day prior to the closing date, with the exchange ratio fixed at 0.2667, if the average closing price is equal to or less than $15 per share and at 0.2222 if the average closing price is equal to or greater than $18 per share.
HomeTrust anticipates that this transaction will be accretive to earnings (before merger costs) at approximately $0.18 per share in the first year of combined operations and accretive to tangible book value in approximately 33 months.
“The combination of HomeTrust and Jefferson is consistent with our stated business strategy to appropriately utilize capital and increase operating efficiency to create a ‘win-win’ opportunity for both our shareholders and the communities we serve,” Stonestreet said.
HomeTrust was advised in the transaction by Sandler O’Neill & Partners LP as financial advisor and Silver, Freedman Taff & Tiernan LLP as legal counsel. Jefferson was advised by Keefe, Bruyette and Woods as financial advisor and Kilpatrick, Townsend & Stockton LLP as legal counsel.
HomeTrust Bancshares Inc. is the holding company for HomeTrust Bank, including its banking divisions — HomeTrust Bank, Tryon Federal Bank, Shelby Savings Bank, Home Savings Bank, Industrial Federal Bank, Cherryville Federal Bank and Rutherford County Bank.
With $1.7 billion in assets as of Sept. 30, 2013, the community-oriented financial institution offers traditional financial services within its local communities through its 21 full service offices in Western North Carolina, including the Asheville metropolitan area, the “Piedmont” region of North Carolina and Greenville, South Carolina.
Jefferson Bancshares Inc.’s holdings include the banking division of Jefferson Federal and State of Franklin Bank.
Jefferson Federal Bank is a community-oriented financial institution offering traditional financial services with offices in Hamblen, Knox, Washington and Sullivan counties.
-From Contributed Reports