Editor’s note: This is a developing story. Follow-up story here.
KNOXVILLE –SmartFinancial, Inc., (Nasdaq: SMBK) (“SmartFinancial”), parent company of SmartBank, and Progressive Financial Group Inc., (“Progressive”), parent company of Progressive Savings Bank, jointly announced today their entry into an agreement and plan of merger pursuant to which SmartFinancial will acquire Progressive.
As of September 30, 2019, Progressive had approximately $296 million of total assets, $258 million in deposits, $190 million in net loans and six branches across Cookeville, Crossville, Jamestown, and Wartburg, Tennessee. The proposed transaction will bolster SmartFinancial’s presence in Tennessee and, based on market share data as of June 30, 2019, SmartFinancial will become the seventh largest community bank by deposits in Tennessee, with total consolidated assets in excess of $2.7 billion.
“The Progressive franchise is complementary to our existing Tennessee footprint, adding adjacent markets where we are excited to introduce the SmartBank banking brand,” explained Billy Carroll, President and CEO of SmartFinancial. “Progressive shares a similar culture to us and their talented team will strengthen our market position and product capabilities.”
“This partnership enhances our strategic vision of building stronger market share in Tennessee,” commented Miller Welborn, Chairman of the Board of SmartFinancial. “We have a proven ability to excel in college markets such as Chattanooga, Knoxville, Murfreesboro and Tuscaloosa. The addition of Cookeville, home of Tennessee Tech University with a student body in excess of 10,000, is a logical extension of our footprint that will further enhance our franchise.”
The transaction consideration, which is comprised of 1,292,592.556 shares of SmartFinancial stock and $14.6 million of cash, is valued on an aggregate basis at approximately $41.4 million, based on SmartFinancial’s closing stock price on October 28, 2019. Based on Progressive’s tangible common equity as of September 30, 2019, the implied price to tangible book value is approximately 124%.
The acquisition, which is subject to customary closing conditions including the approval of Progressive shareholders and the receipt of all necessary regulatory approvals, is expected to be completed in the first half of 2020.
Upon completion of the merger, Ottis H. Phillips, Chief Executive Officer of Progressive, will join the board of SmartFinancial. “We are excited by the prospects of joining a well-respected community bank with strong ties to the state of Tennessee,” remarked Phillips. “We view SmartFinancial as a natural partner and I truly believe that this will be a win-win for all parties involved, including our shareholders, customers, employees and the communities we represent.”