In its seventh acquisition in the past five years, the parent company of SmartBank announced Tuesday it will buy Progressive Savings Bank and its affiliated businesses for $41.4 million in cash and stock.
SmartFinancial Inc., the Knoxville, Tenn.-base banking firm which operates seven SmartBank offices in the Chattanooga and Cleveland, Tenn., markets, is expanding north into Crossville, Cookeville, Jamestown and Wartburg, Tenn., by buying the Progressive Financial Group and its 39-year-old bank. The proposed purchase, which must still be approved by shareholders and regulators, would add nearly $300 million in bank assets to the nearly $2.4 billion-asset SmartBank and add another market and college town to its service territory.
"The Progressive franchise is complementary to our existing Tennessee footprint, adding adjacent markets where we are excited to introduce the SmartBank banking brand," said Billy Carroll, president and CEO of SmartFinancial. "Progressive shares a similar culture to us and their talented team will strengthen our market position and product capabilities."
The Progressive Savings Bank was created in Jamestown, Tenn., in 1980 as a savings and loan association and converted to a commercial bank in 2010. Progressive Savings Bank operates six branches and last year the privately-held bank earned nearly $2.7 million, according to FDIC data.
Banks at a glance
Assets: $2.39 billion
Offices: 36 branches in Tennessee, Alabama, Georgia and Florida, including five in Hamilton County and two in Bradley County.
History: Established in Pigeon Forge in 2007, SmartBank acquired the former Cornerstone Community Bank in Chattanooga and has purchased other banks in Destin, Fla., Tuscaloosa, Ala., Tullahoma, Tenn., and Maryville, Tenn.
Progressive Savings Bank
Headquarters: Jamestown, Tenn.
Assets: $296.8 million
Offices: Six branches, including four in Crossville, one in Jamestown, one in Wartburg and one in Cookeville
History: Established in 1980 as a stock savings bank and converted to FDIC-regulated commercial bank in 2010
Sources: Federal Deposit Insurance Corp., data as of June 30, 2019
"It's great to increase our density in Tennessee and continue to grow in mid-sized and smaller college towns, which seem to be more economically stable and healthy and offer us a real prospect for growth," said Miller Welborn, chairman of the board for SmartFinancial Inc. "The addition of Cookeville, home of Tennessee Tech University with a student body in excess of 10,000, is a logical extension of our footprint that will further enhance our franchise."
Upon completion of the merger, Progressive's chief executive officer, Ottis H. Phillips, will join the board of SmartFinancial.
"We view SmartFinancial as a natural partner and I truly believe that this will be a win-win for all parties involved, including our shareholders, customers, employees and the communities we represent," Phillips said in a statement.
Based on Progressive's tangible common equity as of Sept. 30, the implied purchase price is 24% above the tangible book value of the bank. But Welborn said the purchase should be immediately add to SmartFinancial earnings through consolidated savings possible by the bank merger and future growth expected in the new markets.
The purchase will also include a property and casualty insurance business owned by Progressive Financial Group which Carroll said SmartBank may expand elsewhere.
With the purchase, SmartFinancial will become the seventh largest community bank by deposits in Tennessee, with total consolidated assets in excess of $2.7 billion.
The deal is expected to be completed in the first half of 2019 and the banks will combine back office and IT functions and Progressive Savings will adopt the SmartBank name following the completion of the purchase.
Contact Dave Flessner at email@example.com or at 757-6340