A three-decade friendship between the heads of two Tennessee banks has led to a merger of equals.
Gary Scott, the chairman and chief executive officer of the $394 million-asset PrimeTrust Bank in Nashville, and David Major, the chairman and CEO of the $354 million-asset Bank of the South in Mount Juliet, Tenn., were looking for ways to make their banks more competitive, and each realized the other would make an ideal partner.
Last week the two banks announced plans to combine by the middle of next year to form Mid-America Bancshares Inc.
Since it is a merger of equals, no money is changing hands. Shareholders will exchange their stock in the individual banks for Mid-America shares, and control of the company will be split evenly between PrimeTrust's shareholders and Bank of the South's.
"We feel like this affiliation of our two banks in one of the best markets in the Southeast is going to really enhance our ability to compete with larger banks, spread our costs out some, and we feel like we will be within $1 billion [of assets] in five years," Mr. Scott said.
Mr. Major said the biggest advantage to combining is a larger lending limit, which will help the bank vie with rivals like Amsouth Bancorp, Fifth Third Bancorp, and SunTrust Banks Inc.
Branch locations were another reason to merge, Mr. Major said. The two banks' branches form a semicircle around the south side of the Nashville metropolitan area, he said. They have 12 branches and expect to have 14 by yearend.
In the near term the two banks will operate as separate subsidiaries, but they may be merged two or three years down the road.
"We like the brand they have in the counties they're in and we like the brand in the counties we are in," Mr. Scott said.
