SmartFinancial in Knoxville, Tenn., has agreed to buy Capstone Bancshares in Tuscaloosa, Ala.
The $1 billion-asset SmartFinancial said in a press release Monday that it will pay $84.8 million in cash and stock for the $510 million-asset Capstone. The deal, which is expected to close in the fourth quarter, values Capstone at 159% of its tangible book value.
It would be SmartFinancial’s fourth acquisition over the past five years and its first expansion into Alabama.
“This is a compelling acquisition and we’re excited to partner with Capstone as we look to grow and further expand our footprint in the Southeast,” Billy Carroll, SmartFinancial’s president and CEO, said in the release. “Capstone is a great community bank and we admire their leadership and the culture they’ve created.”
SmartFinancial said the deal should be 25% accretive to its earnings per share in each of the first two years, excluding an expected $5 million in merger-related expenses. It should take less than three years for SmartFinancial to earn back the expected 7.5% dilution to its tangible book value.
Raymond James and Butler Snow advised SmartFinancial. Stephens Inc. and Burr & Forman advised Capstone.