Franklin Financial Network in Tennessee hit a roadblock in its plan to buy Civic Bank & Trust in Nashville, but that didn't stop Franklin from hiring away Civic's chief executive.
Sarah Meyerrose has joined the $2.3 billion-asset Franklin Financial as chief financial officer, the Franklin, Tenn., company said in a Tuesday news release. Meyerrose, 60, had been CEO at the $142 million-asset Civic since October 2014.
Franklin Financial, the holding company for Franklin Synergy Bank, originally planned to close its $30 million deal for Civic by June 30. But regulators' concerns with Franklin Financial's compliance procedures forced the company to delay the closing deadline to March 31, 2017, with an option to extend the deadline to June 30, 2017. Franklin Financial disclosed the merger delay in a regulatory filing last month.
"Federal bank regulators have identified concerns during the course of routine supervisory activities regarding the robustness of [Franklin Financial's] procedures, systems and processes related to certain of its compliance programs, given the rapid growth and increasing complexity of the Bank," Franklin Financial said in its 10-Q filing.
Franklin Financial is working to "diligently to fix" the compliance issues "so that we can do the acquisition the first quarter of next year," Richard Herrington, chairman and CEO, said in a Thursday interview.
Franklin Financial and Civic Bank agreed that it was best for both companies if Meyerrose started as soon as possible at Franklin Financial, rather than wait for the deal's closing, Herrington said.
"Sarah's particular talents are probably better utilized at [a bank of our size] than at a small bank like Civic Bank," Herrington said, adding that Meyerrose was "instrumental in turning that bank around."
Meyerrose will replace Sally Kimble as CFO at Franklin Financial. Kimble will retain her position as chief administrative officer.
Franklin Financial has also hired Civic's former chief financial officer, Terry Howell, as a senior vice president. Howell had been CFO at Civic since October.
Civic said Wednesday that it has hired one of the bank's co-founders, David Barnes, to replace Meyerrose as CEO.