JOHNSON CITY — HomeTrust Bancshares announced Thursday it will acquire Jefferson Bancshares and expand into East Tennessee.
Jefferson Bancshares is the holding company for Morristown-based Jefferson Federal Bank, which includes its State of Franklin Bank division that does business in Sullivan and Washington counties.
The combined company is expected to have about $2.1 billion in assets, according to a release.
As of September 2013, Jefferson had consolidated assets of $498.6 million, deposits of $396 million and shareholders’ equity of $53.3 million.
The transaction is expected to close in the second quarter, subject to regulatory approvals and Jefferson shareholder approval.
Under the terms of the agreement, Jefferson shareholders would receive a total of $8 per share consisting of $4 in cash plus $4 in HomeTrust common stock. According to the release, the number of HomeTrust shares to be issued will be determined based on HomeTrust’s average closing stock price during the 10 trading days ending on the fifth trading day prior to the closing date, with the exchange ratio fixed at .2667 if the average closing price is equal to or less than $15 per share and at .2222 if the average closing price is equal to or greater than $18 per share.
Anderson Smith, Jefferson’s president and CEO, has been named to serve as the East Tennessee market president for HomeTrust and on the HomeTrust Board of Directors.
HomeTrust had $1.7 billion in assets as of September 2013 and serves Western North Carolina, the Piedmont region of North Carolina and Greenville, S.C.
The release noted HomeTrust anticipates the transaction will be accretive to earnings at about 18 cents per share in the first year of combined operations and accretive to tangible book value in approximately 33 months.
“We are operating in an increasingly complex regulatory environment where scale and efficiency of operations is paramount,” HomeTrust Chairman, President and CEO Dana Stonestreet said.
“We believe that strategically aligning with like-minded regional community banking institutions, such as Jefferson, will allow the HomeTrust franchise to achieve greater economies of scale and better position us to forge additional partnerships by augmenting our already strong capital base.”