New network of legacy financial institutions intends to provide innovation and capital to strengthen and sustain Tennessee’s community banks and those they serve
Lineage Financial Network, Inc. (Lineage) announced today the concurrent signing of two separate merger agreements, resulting in Lineage owning and operating two community banks in middle Tennessee and west Tennessee under each bank’s existing name and legacy reputation.
The two banks being acquired are Sumner Bank & Trust, which was founded in 2005 and is headquartered in Gallatin, Tenn., and Citizens Bank & Trust Company, founded in 1927 and headquartered in Atwood, Tenn. Lineage has also agreed to merge with Bumpushares, Inc., the parent company of Citizens Bank & Trust Company, with the intent of becoming a registered bank holding company. When the acquisitions are completed and closed, Sumner Bank & Trust and Citizens Bank & Trust Company will each be separately-operated, wholly-owned bank subsidiaries of Lineage.
Lineage intends to preserve the legacies of both Citizens Bank & Trust Company and Sumner Bank & Trust as they continue to serve their communities. “We have been dedicated to serving our customers and community for more than 80 years,” said Citizens Bank & Trust Company Chairman and Chief Executive Officer, Paul Moore, “and we look forward to growing in our capabilities with Lineage to continue to meet the expanding needs of our community and surrounding counties on the foundation of trust we’ve built for generations.”
Both banks will keep their local names and focus while enhancing their local financial leadership through the technology and capital of Lineage. This will enable them to grow their customer base and build on their solid reputations within their communities.
“The mergers of Citizens Bank & Trust Company and Sumner Bank & Trust into Lineage are designed to deliver enhanced value to the stakeholders of both banks,” said Keith Hatley, the President and Chief Executive Officer of Sumner Bank & Trust. “We’re receiving significant value for our shareholders, preserving our name, staff, and legacy, together with the opportunity to build on our reputation and increase our resources to offer additional support for our respected clients and customers.”
Some of the larger shareholders of the acquired institutions are expected to become shareholders of Lineage. “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,” said Lineage founder and Chief Executive Officer, Richard Herrington. “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.”
Herrington also mentioned earlier media reports about Lineage and its plans. “We have been clear from the outset that we are not starting a new bank. That’s not our strategy. We believe that many of Tennessee’s existing community banks not only can survive, but can thrive, in the 21st century if they can find a new partner to bring innovation and capital to build on their great legacies. Our team sees exciting opportunities ahead to make strong banks even stronger, while keeping their legacy names and good reputations intact.”
“Consolidating into a bigger bank and losing your name and history shouldn’t be the only answer for banks looking for a change,” added William “Bill” Lucado, one of Lineage’s founding directors and a long-time banking industry leader and consultant. “We believe Lineage can be another alternative for banks that have reached an inflection point.”
Each of the merger agreements has been unanimously approved by each institution’s board of directors, and the shareholders of Bumpushares, Inc. have already approved its merger transaction. The mergers are expected to close in the second quarter of 2020, subject to receiving the requisite approval of the Sumner Bank & Trust shareholders, receipt of all required regulatory approvals, and fulfillment of other closing conditions described in the merger agreements.
Commerce Street Capital, LLC served as financial advisor to Lineage Financial Network, Inc., and Bone McAllester Norton PLLC and the Law Office of Alan D. Hall served as legal counsel. ProBank Austin served as financial advisor to Sumner Bank & Trust, and Thompson Burton PLLC served as legal counsel. Serving as legal counsel to Bumpushares, Inc. and Citizens Bank & Trust Company was the law firm of Henry, McCord, Bean, Miller, Gabriel & LaBar, PLLC.
Source: Company Press Release