Indiana-based First Financial will buy Tennessee-based SimplyBank in effort to grow its Southeast U.S. footprint, the banks announced Tuesday.
The $4.8 billion asset Midwestern bank will pay $73.4 million cash for SimplyBank, which has $702 million in assets, 10 Tennessee branches and three Georgia branches.
The deal will expand First Financial into Georgia for the first time and deepen its base in Tennessee, where it has nine branches. The bank has had a presence in the Volunteer State since its 2019 acquisition of HopFed Bancorp, which was headquartered in Kentucky.
“[Tennessee’s] market is very active and growing. There’s a lot of prosperity in Tennessee, and that provides a very good climate for banking,” said First Financial CEO Norman Lowery. “When the opportunity to talk with the folks at SimplyBank came up, we were really excited to get over to the eastern part of the state.”
The banks have been engaged in discussions for three to four months, Lowery said.
The transaction is expected to close in the second quarter of 2024. Following integration, the combined bank will look into offering more products and services through the newly acquired branches, including First Financial’s trust and asset management services, he said.
“Typically, when you go through [deals], you find things that we do a certain way that we like best, and I don’t think I’ve been through [a merger] where we don’t also find things that they do well that we adopt. We’re always looking for best practices,” said Lowery, who has been CEO for 28 years.
Lowery will retire in January and be replaced by Norman D. Lowery, his son, who has been with the bank even longer than he has — for 33 years. The senior Lowery will remain with the bank for a year to help with the transition, including the integration of SimplyBank.
Upon completion, the combined bank would have roughly $5.5 billion assets.
Several banks have made efforts to expand their business in the Southeast in recent years.
Fifth Third CEO Tim Spence said last December that deposits in the Southeast were growing at a 7.3% annual clip, far surpassing its 2.4% Midwest growth rate. A January filing showed the bank intended to open two branches in the Southeast this year.
TD said in May it would target South Florida, North Carolina and Atlanta in the expansion of its branch network planned through 2027. U.S. CEO Leo Salom told Reuters at the time that the Southeast "is going to be a very important part” of its overall growth plan.
Bank of America said in June it was eyeing nine new markets, with three — Louisville, Kentucky; Birmingham, Alabama; and Huntsville, Alabama — in the Southeast. Five branches in Louisville and one in Birmingham will open next year, with four more planned in Birmingham and one in Huntsville by 2026.
Last year, First Financial announced it would be closing roughly 10% of its branches, chalking the consolidation up to a shift in consumer behavior toward online banking.
