Nashville-based FirstBank hopes to retain all Franklin Synergy bankers as the companies move forward with a planned merger.
The increased size of the combined company could also create some new jobs in a planned FirstBank operations center in Franklin, however some jobs with redundant duties may be cut.
On a conference call yesterday, FirstBank executives said Franklin Synergy Bank’s pool of talented bankers was an important factor in the acquisition.
“Their bankers are the best in their markets. What we found during diligence was a powerful team of community bankers that had built a very strong core asset,” FirstBank CEO Chris Holmes said.
A FirstBank investor presentation estimated the merger will reduce Franklin Synergy’s non-interest operating expenses by 30%. Some of those savings would be achieved by consolidating seven branches.
About a quarter of Franklin Synergy branches are located within a mile of a FirstBank branch. Homes said the company hasn’t decided which branches to close yet.
“Not all of those closures will be Franklin Synergy branches,” he said. “We'll keep the best of what our two banks offer.”
The company could also realize cost savings by cutting jobs with overlapping work duties at the combined company. Back office positions such as finance, loan and deposit operations and IT are the most likely to have overlapping duties.
FirstBank’s Director of Marketing and Communications Jeanie Rittenberry wrote in an email that the company hasn’t made any decisions about eliminating those positions and pointed out that increasing the size of the bank will likely create new jobs.
FirstBank told Franklin Synergy employees in a letter that anyone whose job is impacted by the merger will be given consideration for alternate roles, assistance with transition. That could include transfer or severance. The bank also created a handout for customers explaining the merger.
Franklin Synergy CEO Myers Jones also sent out a letter to employees yesterday explaining how the merger would affect them.
“You’re likely already wondering, 'what does this mean for me?' Mergers bring change to both organizations, and with change comes questions,” he wrote in the letter. “We will work as diligently as possible to answer those questions for you and recognize that we are only at the beginning of an exciting and sometimes uncertain process.”
The company has entered into employment agreements with key Franklin Synergy executives, but didn’t reveal which executives have signed deals.
On the conference call, Holmes said that Franklin Synergy CEO Myers Jones and CFO Chris Black will have some role in the new company, but didn’t say what the role would be. Franklin Synergy Chief Credit Officer Eddie Maynard will also have a senior position in the combined company.
Three Franklin Synergy board members will also be added to the FirstBank board as independent directors, but the company didn’t say which board members would be appointed.
FirstBank executives repeatedly mentioned Franklin Synergy’s talent pool as a key reason behind the deal, but also expressed relief that they wouldn’t have to compete anymore.
“While FirstBank has had a presence in Williamson County for a number of years, we've been largely irrelevant there ... Our lack of progress in the market has been partially due to Franklin Synergy's dominance,” Holmes said. “It feels great to stop beating our head against the wall and be on the same team going forward.”
In response to a question from an investor, Holmes said the deal came together in the fourth quarter of last year, picking up steam towards the end of the year. He said the deal came together partly through personal relationships because the banks operate in the same market.
“We're sitting in a branch two blocks from the Franklin Synergy headquarters... We know each other. We see each other socially when we go to football games and things like that,” he said. “We've known several folks there. Chris Black has been an employee at both organizations ... He left on good terms, which was a good thing for him.”
FirstBank executives said they plan to focus on carrying out the merger in 2020 rather than searching for new banks to acquire.
FirstBank hopes to retain as many Franklin Synergy customers as possible, but he Franklin bank will adopt FirstBank’s name and signage after closing.
Franklin Synergy’s stock increased by about 12% following the announcement. FirstBank’s stock initially fell by a few percent but mostly recovered by midday on Wednesday.