CapStar to buy two banks in middle Tennessee

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CapStar Financial Holdings in Nashville, Tenn., has agreed to buy FCB Corp. in Manchester, Tenn.

The $2 billion-asset CapStar said in a press release Thursday that it will pay $85.1 million in cash and stock for FCB, which owns the $292 million-asset First National Bank of Manchester and 50.6% of the $175 million-asset Bank of Waynesboro.

CapStar will also buy the remaining minority stake for Bank of Waynesboro.

The deals are expected to close in the second or third quarter.

“This strategic partnership will mutually benefit each of the companies’ employees, customers, and shareholders,” Timothy Schools, CapStar’s president and CEO, said in the release.

“The combination continues to strengthen CapStar’s funding capabilities while providing more granular and higher-yielding loan opportunities,” Schools added.

The banks have nine branches, $317 million in loans and $402 million in deposits in middle Tennessee.

CapStar said it expects the transaction to be 5% accretive to its 2020 earnings per share. It should take less than three years for CapStar to earn back any dilution to its tangible book value.

Keefe, Bruyette & Woods and Wachtell, Lipton, Rosen, & Katz advised CapStar. ProBank Austin and Butler Snow advised FCB. Mercer Capital provided a fairness opinion to the special committee of Bank of Waynesboro’s board.

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