Richard Herrington is still scouting all of Tennessee for potential deals for his year-old Lineage Financial Network. But the veteran banker also is moving to set up shop very close to home.
Herrington — the former CEO of Franklin Financial Network and Civitas BankGroup, among others — and his team launched Lineage shortly before the COVID-19 pandemic arrived and about a year after Herrington resigned from Franklin Financial.
They announced agreements to buy Sumner Bank & Trust in Gallatin and Citizens Bank & Trust in Atwood, 80 miles west of Dickson, and said they were scouting for other Tennessee community bank deals. The deal for Citizens — which has assets of about $27 million and essentially broke even in 2020 — has closed but the Sumner transaction fell apart late last summer, Herrington says, because institutional investors stepped away from projects amid the uncertainty of the pandemic.
Herrington is undeterred and his main plan for Lineage — buy small banks around the state, let them keep their local identities and give them a technology/systems upgrade — remains the same. He has raised about $15 million in all to give his team a few years worth of working capital and expects to go back to the market late this year as other acquisitions materialize. (Investors who committed last year to backing the Sumner Bank & Trust buy were given their money back.)
“Sumner slowed things down but our goal is still to create a community banking network,” he told the Post. “There’s a real need for technology investments at many of these banks. We think we can wed their loyal customer bases to top-class tech.”
While investing in IT at Citizens — to the tune of $400,000 since January — Herrington also is targeting a hometown presence. He has applied with federal and state regulators to open a branch of the new Lineage Bank — Citizens now does business as a division of that brand — at 120 Fifth Ave. N. in downtown Franklin, a block from Five Points. That building long housed a Cornerstone Federal Credit Union branch that now sits along Columbia Avenue about 1.5 miles south.
If approved, the Fifth Avenue office will also become Lineage’s headquarters and, said Herrington, give the company a base from which to grow its assets and begin to flesh out plans for three or four more offices in Williamson and Davidson counties.
“We haven’t knocked on people doors yet,” Herrington said, adding that he expects regulatory approval soon. “But people have been knocking on our doors.”
Herrington co-founded Lineage with his son of former Franklin Financial COO Kevin as well as local entrepreneur Tom Black — whose background includes FISI-Madison, Private Business Inc. and Ncontracts — and Memphis investor Bill Lucado.