Reliant to gain niche lending business in acquisition
Reliant Bancorp in Brentwood, Tenn., has agreed to buy First Advantage Bancorp in Clarksville, Tenn.
The $1.9 billion-asset Reliant said in a press release Wednesday that it would pay $123.4 million in cash and stock for the $257 million-asset First Advantage. The deal, which is expected to close in the second quarter, priced First Advantage at 152.2% of its tangible book value.
The acquisition will allow Reliant to move into Tennessee’s Montgomery County, which is northwest of Nashville. First Advantage has eight branches, $170 million in loans and $212 million in deposits.
Including its pending purchase of Tennessee Community Bank Holdings, Reliant said it expects the First Advantage deal to be 18% accretive to its 2021 earnings per share. It should take three years for Reliant to earn back the projected 7.3% dilution to its tangible book value.
Reliant said it will also gain a specialty lending business that provides loans for buying manufactured homes.
“We are very excited about the growth opportunity the proposed merger … presents,” DeVan Ard Jr., Reliant’s chairman, president and CEO, said in the release.
“Our companies share similar values, and our partnership will reinforce the foundation for an extraordinary financial services company whose focus is the delivery of exceptional experiences to our customers, employees, and the communities in which we serve,” Ard added.
Two First Advantage directors will join Reliant’s board.
Reliant plans to cut about 35% of First Advantage’s annual noninterest expense. The company expects to incur $14.2 million in merger-related charges.
Piper Jaffray and Butler Snow advised Reliant. Raymond James and Kilpatrick Townsend & Stockton advised First Advantage.