Veteran banker forms company to buy two Tennessee community banks
Richard Herrington is returning to banking.
Herrington, who abruptly retired as CEO of Franklin Financial Network a year ago, has formed a new company that plans to buy two small banks in middle Tennessee.
Lineage Financial Network said in a press release Tuesday that it intends to become a bank holding company by merging with Bumpushares, the parent of Citizens Bank & Trust in Atwood. Lineage also plans to buy Sumner Bank & Trust in Gallatin.
Lineage did not disclose the prices of the deals, which are expected to close by midyear.
Lineage plans to let the $196 million-asset Sumner and the $25 million-asset Citizens operate under their existing brands.
Lineage would have $133 million in loans and $199 million in deposits.
“We believe the acquisition of these two financial institutions creates an exceptional opportunity for local banks to maintain their heritage and legacies as they serve their communities,” Herrington said in the release.
“This is the start of a new chapter in innovation for the community banking industry and we look forward to pursuing growth at these two great institutions and exploring potential future acquisitions of other high-quality Tennessee banks," he added.
Sumner agreed in early 2013 to be sold to HopFed Bancorp for $14.3 million in cash. The companies called off the sale a few months later after Sumner failed to meet an undisclosed performance requirement. Activist investor Joseph Stilwell, who owned shares in HopFed, also objected to the acquisition.
Franklin Financial, which has been grappling with exposure to shared national credits and health care loans, agreed to be sold to FB Financial in January for $611 million.
Commerce Street Capital, Bone McAllester Norton and Alan D. Hall advised Lineage. ProBank Austin and Thompson Burton advised Sumner. Henry, McCord, Bean, Miller, Gabriel & LaBar advised Bumpashares.