Elizabethton-based Citizens Bank has announced it has reached an agreement to acquire American Trust Bank of East Tennessee in a nearly $20 Million deal.
The respective Boards of Directors of Citizens Bank and American Trust Bank of East Tennessee have unanimously approved an agreement and plan of merger for the two East Tennessee banks.
Based on the terms of the merger agreement, Citizens Bank, an independent community bank wholly-owned by Citco Community Bancshares, will acquire American Trust Bank of East Tennessee (“ATB”) for $19.8 million in cash.
Citizens Bank currently operates locations across the Tri-Cities while ATB operates in the Knoxville area.
“It’s not a merger, it’s an acquisition. We are buying them,” said Citizens Bank Chairman and CEO Joe LaPorte III.
Because Citizens Bank is acquiring ATB, current account holders of Citizens Bank will see very little change. LaPorte said there will be “absolutely not changes” the accounts of Citizens Bank customers and the only changes to affect them will be that Citizens Bank will soon have even more bank and ATM locations throughout East Tennessee to serve them.
“Their customers will see some changes,” LaPorte said of ATB’s current account holders. “We use the same vendor, so we hope to see very little change for them.”
The transaction to complete the acquisition is expected to close in the fourth quarter of 2016, at which time Citizens Bank will become among the 20 largest Tennessee-headquartered banks, based on asset size. The agreement and plan of merger is subject to regulatory and American Trust Bank shareholder approval.
“On behalf of the board, officers and employees of American Trust Bank, we are pleased to have reached this merger agreement,” said American Trust Bank Chairman, President and CEO E.F. Wheeler Jr. “Citizens Bank has a well-established reputation in East Tennessee for being a progressive yet fiscally conservative community bank. Customers can look forward to innovative account selections and technology-focused delivery channels that are well-suited for the Knoxville area’s expanding economy.”
Founded in 2004, American Trust Bank operates four locations across three East Tennessee counties including two branches in Knoxville (Knox County), one in LaFollette (Campbell County) and one in Lenoir City (Loudon County). ATB’s locations will add to Citizens Bank’s existing 12 full-service banking offices in four cities — Johnson City, Elizabethton, Kingsport and Bristol, Tennessee/Virginia.
The primary ownership group for Citizens Bank and its holding company is the LaPorte family of Elizabethton. In 1956, Joe LaPorte, Jr. was an FDIC bank examiner-turned-banker when he joined Citizens Bank as a loan officer. He became the bank’s president in the early 1960s. Citizens Bank is now owned by his four sons: Sam, Chris, Steve and current Chairman and CEO Joe LaPorte III. With a history stretching more than 80 years, Citizens Bank has had a long legacy of serving communities throughout the Tri-Cities area. The LaPorte family’s deep ties to Knoxville and the University of Tennessee make the Knoxville area a logical focus for expansion.
“Our board and management team has had an eye on the Knoxville market as a step in Citizens Bank’s continued growth and success for quite some time,” LaPorte said. “This merger with ATB, along with a Citizens Bank loan production office opened in Knoxville earlier this year, provides the opportunity we had been seeking.”
“We are impressed by the physical presence and quality of personnel associated with American Trust Bank, which provides a great springboard for Citizens Bank’s future,” LaPorte continued. “We anticipate continuing our growth and remaining a fiercely independent bank, headquartered in and serving East Tennessee.”
In connection with this pending transaction, SunTrust Robinson Humphrey Inc. is serving as financial advisor and Alston & Bird LLP as legal counsel to Citizens Bank. Olsen Palmer LLC is serving as financial advisor and Miller Martin PLLC as legal counsel to American Trust Bank.
Originally founded in 1934 in Elizabethton, Citizens Bank has total assets in excess of $700 million and provides comprehensive personal and business banking services along with mortgage and investment services. The bank had 153 employees as of March FDIC reports. For more information, visit the company’s website at www.citizensbank24.com.
Founded in 2004, ATB has total assets of approximately $141 million as of March 2016 and four locations across three counties in East Tennessee. The company had 36 employees as of March FDIC reports. For more information, visit the company’s website at www.atbanktn.com.