FB Financial Corporation (NYSE:FBK) entered into a definitive merger agreement to acquire Franklin Financial Network, Inc. (NYSE:FSB) for approximately $590 million on January 21, 2020. Under the terms of the merger agreement, Franklin shareholders will receive 0.9650 shares of FB Financial common stock and $2 in cash for each share of Franklin stock. The consideration will be paid 95% in shares and 5% in cash. Post-acquisition, Franklin will be merged with and into FB Financial. Upon completion of the merger, FB Financial shareholders immediately prior to the effective time of the merger will own approximately 69% of the combined company and Franklin shareholders immediately prior to the effective time of the merger will own approximately 31% of the combined company. Franklin Synergy Bank, a wholly owned subsidiary of Franklin, will merge with and into FirstBank, a wholly owned subsidiary of FB Financial. If the termination of the transaction occurs, then in such case both FB Financial and Franklin would be required to pay a termination fee of $21.4 million.

Jim Ayers, Executive Chairman, and Chris Holmes, President and Chief Executive Officer of FirstBank will continue to lead FirstBank and much of Franklin Synergy Bank's senior management team will assume various leadership roles following the merger. Three members of Franklin's Board of Directors will be appointed to FB Financial's Board of Directors. Where there is a duplication of job duties, it is expected that some jobs in the combined workforce may be eliminated. Those whose jobs are impacted will be given full consideration for alternate roles, or assistance with transition, which may include transfer or severance. FB Financial will establish a primary operations center and its mortgage headquarters for the combined company at Franklin's existing corporate headquarters in downtown Franklin, Tennessee.

The deal is subject to regulatory approvals, including the approval of the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Tennessee Department of Financial Institutions; approval by FB Financial's and Franklin's shareholders; authorization for listing on the New York Stock Exchange of the shares of FB Financial common stock to be issued in the merger; FB Financial receiving a written opinion of Wachtell, Lipton, Rosen & Katz, in form and substance reasonably satisfactory to FB Financial, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code; and effectiveness of the registration statement on Form S-4 for the FB Financial Common Stock to be issued in the merger. The special meetings of the shareholders of Franklin and FB Financial will be held on June 15, 2020. James W. Ayers, FB Financial's Executive Chairman and 44% owner of FB Financial, has entered into a customary voting agreement to vote his shares in favor of the transaction and each member of Franklin's Board of Directors has entered into similar voting agreements. The deal has been unanimously approved by the Boards of Franklin and FB Financial. The Boards of Directors of FB Financial and Franklin unanimously recommended that their respective shareholders vote in favour of the transaction. As on June 15, 2020, the transaction has been approved by the shareholders of Franklin Financial Network, Inc.

The transaction has received regulatory approval. The Franklin Transaction Committee comprised of six independent members of the Franklin Board of Directors including James Cross, Jimmy Allen, Hank Brockman, Paul Pratt, Gregory Waldron and Benjamin Wynd to advise on the deal. The transaction is expected to close by mid- February 2020. As of March 13, 2020, the transaction is expected to close in third quarter of 2020. As of July 21, 2020, the transaction is expected to close in August 2020. As of August 5, 2020, the transaction is expected to close on August 15, 2020. The transaction is expected to be approximately 10% accretive to FB Financial's earnings per share on a fully-phased in basis and neutral to FB Financial's tangible book value per share at the close of the transaction.

J.P. Morgan Securities LLC acted as fairness opinion provider and financial advisor and Nicholas G. Demmo of Wachtell, Lipton, Rosen & Katz acted as legal advisor to FB Financial. Evercore Group L.L.C. acted as fairness opinion provider and financial advisor to Franklin. Mark C. Kanaly, David S. Park, Kyle G. Healy, Blake C.MacKay, Kerry T.Wenzel, Scott A. Harty and Justin R. Howard of Alston & Bird LLP acted as legal advisors to Franklin. Franklin has agreed to pay Evercore a fee for its services that is estimated, based on information available as of the date of announcement of the merger, to be approximately $7.3 million, of which $1 million was paid upon delivery of Evercore's opinion, and the balance of which will be payable contingent upon the consummation of the merger. Out of total fee being paid to Evercore, $0.14 million is retainer fees. J.P. Morgan received a fee from FB Financial of $2 million for the delivery of its opinion. For services rendered in connection with the proposed merger, FB Financial has agreed to pay J.P. Morgan an additional $2 million payable upon the closing of the merger. In addition, J.P. Morgan may, at FB Financial's sole discretion, receive a fee of $1 million payable upon the closing of the merger. In the event the merger is not consummated and FB Financial receives any break-up fee following or in connection with the termination, abandonment or failure to occur of the proposed merger, FB Financial will pay J.P. Morgan a fee equal to 15% of any such break-up fee (less any of the above fees already paid by FB Financial), but in no event will any such fee paid to J.P. Morgan exceed $4 million. OKAPI Partners acted as information agent for Franklin and will receive a fee of $0.02 million. Mitchell S. Eitel and Jared M. Fishman of Sullivan & Cromwell LLP acted as legal advisor to J.P. Morgan.

FB Financial Corporation (NYSE:FBK) completed the acquisition of Franklin Financial Network, Inc. (NYSE:FSB) on August 15, 2020. immediately following the merger, Franklin Financial Network merged with and into FB Financial, with FB Financial continuing as the surviving corporation. Immediately following this merger, Franklin Synergy Bank, merged with and into FirstBank, with FirstBank continuing as the surviving bank. Pursuant to the merger agreement, the Board of Directors of FB Financial agreed to expand the Board by three directors and fill the resulting vacancies at the effective time with three Directors serving on the Franklin Board of Directors. With the close of the transaction, James W. Cross IV, Melody J. Sullivan, and Jimmy E. Allen join the FB Financial Board of Directors.