HomeTrust Bancshares (HTBI) in Asheville, N.C., has agreed to buy Jefferson Bancshares (JFBI) in Morristown, Tenn.

The $1.7 billion-asset HomeTrust will pay $51.2 million, or $8 a share, in cash and stock for Jefferson. The transaction is expected to close in the second quarter.

HomeTrust said it expects the acquisition to be accretive to earnings by about 18 cents a share in the first year, excluding merger-related costs. The deal should be accretive to tangible book value in less than three years.

Jefferson has $499 million in assets and 12 branches. Anderson Smith, Jefferson's president and CEO, will become HomeTrust's market president for east Tennessee and join the company's board.

"We are enthusiastic to enter the east Tennessee market by connecting with an institution sharing our core values," Dana Stonestreet, HomeTrust's chairman, president and chief executive, said in a press release Thursday. "We are operating in an increasingly complex regulatory environment where scale and efficiency of operations is paramount. We believe that strategically aligning with like-minded regional community banking institutions, such as Jefferson, will allow the HomeTrust franchise to achieve greater economies of scale and better position us to forge additional partnerships by augmenting our already strong capital base."

HomeTrust was advised by Sandler O'Neill and Silver, Freedman, Taff & Tiernan. Jefferson was advised by Keefe, Bruyette and Woods and Kilpatrick, Townsend & Stockton.

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