Franklin Financial Network’s purchase of Civic Bank & Trust in Nashville seems to be back on track.
The $3.6 billion-asset Franklin said in a press release Friday that it has reapplied with regulators to buy the $165 million-asset Civic. The filing came less than a week before a deadline that could have led to the $30 million deal’s termination.
Franklin, which is based in a Nashville suburb, agreed to buy Civic in late 2015. The deal was supposed to close last year.
The transaction hit the shoals when Franklin entered into memorandums of understanding with the Federal Reserve and the Tennessee Department of Financial Institutions tied to problems with the bank’s commercial real estate lending practices. A separate agreement with the Fed limited Franklin’s ability to pursue acquisitions or open branches until the issues were resolved.
The regulatory snag forced Franklin and Civic to delay the deal on three occasions.
Things took a more positive turn last month, when Franklin announced that the Fed had approved its plan to open a branch in Murfreesboro, Tenn. — providing a clear indication that its standing had improved with regulators.
Franklin displayed more optimism during a late October conference call to discuss third-quarter results.
The company has largely addressed regulators’ concerns and is “relatively confident” it can move on with the Civic deal and “become more active in 2018,” Sara Meyerrose, Franklin’s chief financial officer, said during the call.
Meyerrose, who was previously Civic’s CEO, joined Franklin in June 2016.
Still, Franklin indicated in its Nov. 9 quarterly filing with the Securities and Exchange Commission that it continues to operate under the memorandums of understanding.
Civic, which opened in July 2005, has a branch in Nashville. The deal would push Franklin’s share of metropolitan Nashville’s $57 billion deposit market past 5%.