Under the terms of the merger which has been unanimously approved by both companies’ boards of directors, MidSouth Bank shareholders will receive 0.425926 shares of Franklin Financial Network, Inc. common stock for each common share of MidSouth Bank and 0.851852 shares of Franklin Network, Inc. common stock for each share of MidSouth Bank preferred stock. Upon closing, Franklin Financial Network, Inc. shareholders will own approximately 64% of the combined company; MidSouth Bank’s shareholders will own approximately 36%.
Richard E. Herrington, President and Chief Executive Officer of Franklin Synergy Bank, will be the CEO of the combined organization. Lee M. Moss, Chairman and Chief Executive Officer of MidSouth Bank, will be the President of the combined organization. Sally P. Kimble, Chief Financial Officer of Franklin Synergy Bank, will be the combined company’s CFO and Kevin D. Busbey, MidSouth’s Chief Financial Officer, will be the CFO of the combined bank. Upon closing, Moss and two of MidSouth’s existing outside directors will join the board of Franklin Network, Inc., expanding the total number of directors to ten.
“This merger is a continuation of our strategy to expand selectively our geographic footprint in contiguous markets with long-term growth potential” said Richard E. Herrington. “Moreover, MidSouth customers and Rutherford County will benefit from the continued presence and engagement of a locally managed bank.”
“This merger creates tremendous opportunities to build on the successes that each company has achieved individually in its own markets,” said Lee M. Moss. “We are uniting two strong community banks and creating a dominant community bank in the Middle Tennessee banking market with greater competitive strength, growth potential and profitability.”
Upon completion of the transaction, based on financial results as of September 30, 2013, the combined bank will have approximately $920 million in total assets, $758 million in total deposits and $544 million in total loans while operating in the demographically attractive Tennessee markets of Williamson and Rutherford counties. Based on June 30, 2013 FDIC deposit data,
Franklin Synergy Bank ranked 3rd in deposit market in Williamson County while MidSouth ranked 5th in Rutherford County. The headquarters for the combined company and bank will remain in Franklin, Tennessee.
The transaction is expected to close during the first or second quarter of 2014, pending regulatory approvals, the approval of the shareholders of both companies and the satisfaction of other customary closing conditions. Upon closing of the transaction, on a pro forma basis, Franklin Synergy Bank will continue to maintain regulatory capital ratios in excess of the “well-capitalized” level.
Franklin Financial Network, Inc. was advised by the investment banking firm of SunTrust Robinson Humphrey, Inc., as well as the law firm of Baker Donelson. MidSouth Bank was advised by the investment banking firm of Sterne Agee & Leach, Inc. and the law firm of Daniel W. Small & Company.
About Franklin Financial Network, Inc and Franklin Synergy Bank
Founded in 2007, Franklin Financial Network, Inc. is the parent company of Franklin Synergy Bank, a full-service community bank operating 6 branch offices in Williamson County. With total assets of approximately $658 million, the company’s unparalleled competitive advantage is its 122 employees and a strong corporate culture paired with a clear vision that has provided customers with uncompromising services and individualized solutions to their financial needs. More information about Franklin Synergy Bank can be found at http://www.franklinsynergybank.com.
About MidSouth Bank
Founded in 2003, MidSouth Bank is a full-service community bank operating 5 branch offices in Rutherford County. With total assets of approximately $261 million, MidSouth Bank provides quality financial services to individuals, businesses, government entities, nonprofit organizations, and community service groups. More information about MidSouth Bank can be found athttp://www.midsouthbanking.com.
Safe Harbor for Forward-Looking Statements
This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other factors. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: ineffectiveness of the company’s business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations, including industry consolidation and development of competing financial products and services; interest rate movements; changes in credit quality; inability to achieve merger-related synergies; difficulties in integrating distinct business operations, including information technology difficulties; volatilities in the securities markets; and deteriorating economic conditions, and other risks and uncertainties, including those to be detailed in the referenced joint proxy statement/prospectus.
This document is not an offer to sell shares of Franklin Financial Network Inc.’s securities which may be issued in the proposed transaction. Such securities are offered only by means of the joint proxy statement/prospectus referred to above.