Former Franklin Financial Network CEO Richard Herrington

Former Franklin Financial Network CEO Richard Herrington

Former Franklin Financial Network CEO Richard Herrington has signed deals to buy two area community banks that will be housed under his new Lineage Financial Network umbrella.

Herrington, who abruptly resigned from Franklin Financial nearly a year ago, said late Tuesday that Lineage will acquire Sumner Bank & Trust in Gallatin and Citizens Bank & Trust in Atwood, 80 miles west of Dickson. Terms of the deals, which are expected to close next quarter, are not being disclosed.

Sumner Bank & Trust finished 2019 with assets of $196 million, up from $168 million a year earlier. Driven by net interest income, the team led by President and CEO Keith Hatley last year grew profits 22 percent to $1.9 million. Citizens Bank & Trust, meanwhile, grew only marginally in 2019 to $25 million in assets. The lender founded in 1927 earned about $200,000 last year, down slightly from 2018.

Both banks will retain their brands under the bank holding company structure Lineage will gain by merging with Citizens’ holding company, Bumpushares Inc.

“We look forward to pursuing growth at these two great institutions and exploring potential future acquisitions of other high-quality Tennessee banks,” Herrington said in a statement. “Many of Tennessee’s existing community banks not only can survive, but can thrive, in the 21st century if they can find a new partner to bring innovation and capital to build on their great legacies.”

By one measure, Herrington’s potential market across the Volunteer State is sizable: At year’s end, Tennessee was home to 96 banks with assets of $100 million to $1 billion. Combined, they had more than $35 billion in assets and nearly $25 billion in loans.

Worth noting about Sumner Bank & Trust: The Lineage deal is the second attempt by the Gallatin bank’s board to sell. In 2013, Kentucky-based HopFed Bancorp agreed to pay $14.3 million for the local lender but that deal fell apart when Sumner Bank & Trust couldn’t meet a performance goal.

This story first appeared in our partner publication The Nashville Post.

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