Item 8.01. Other Events.
As previously announced, on
On
The Supplemental Disclosures supplement and should be read in conjunction with
the joint proxy statement/prospectus, which should be read in its entirety,
along with periodic reports and other information Franklin and FB Financial have
filed with the
SUPPLEMENTAL DISCLOSURES TO THE JOINT PROXY STATEMENT/PROSPECTUS
Opinion of Franklin's Financial Advisor
1. The disclosure under the heading "The Merger-Opinion of Franklin's Financial
Advisor -Franklin Analyses - Selected Public Company Trading Analysis" is hereby amended by deleting everything (including the tables) under this heading before the paragraph that begins with "Based on the multiples it derived for the Franklin selected companies…" in page 80 of the joint proxy statement/prospectus, and replacing them with the paragraphs and the tables below:
Evercore reviewed and compared certain financial information of Franklin to
corresponding financial multiples and ratios for selected bank holding companies
publicly traded on NASDAQ, the
For each of the Franklin selected companies, Evercore calculated the closing
price per share of the company's common stock as of
Financial Metric Price to Price to Price to 2019 EPS 2020 EPS TBVPS ROATCE Selected Regional Banks - Southeast Carter Bank & Trust 18.9x 16.2x 1.33x 7.8% Capital City Bank Group, Inc. 16.4x 15.9x 2.06x 12.2% City Holding Company 15.2x 15.8x 2.53x 15.2% FB Financial* 13.8x 13.7x 2.12x 14.5% First Bancorp 12.1x 12.6x 1.95x 14.5% HomeTrust Bancshares, Inc. 18.2x 17.1x 1.23x 7.3%
Seacoast Banking Corporation of Florida 15.6x 15.1x 2.11x 12.9% ServisFirst Bancshares, Inc.
13.8x 13.7x 2.49x 16.4% Southern National Bancorp of Virginia, Inc. 10.8x 12.3x 1.46x 11.2% The First Bancshares, Inc.* 12.2x 11.0x 1.76x 15.6% Selected National Banks Bank OZK 8.9x 9.9x 1.09x** 10.8% ConnectOne Bancorp, Inc.* 12.1x 11.6x 1.69x 13.1% Customers Bancorp, Inc. 11.2x 7.8x 0.90x 10.6% Eagle Bancorp, Inc. 11.0x 10.7x 1.41x** 12.7% First Internet Bancorp 10.3x 9.2x 0.81x 8.5% Flushing Financial Corporation* 13.2x 12.2x 1.15x 8.9% Great Southern Bancorp, Inc. 12.1x 13.3x 1.51x 11.0% Live Oak Bancshares, Inc. 51.2x 29.7x 1.43x 4.7% Luther Burbank Corporation 12.9x 11.7x 1.07x 8.7% Merchants Bancorp 9.4x 10.0x 1.38x 12.6% * TBVPS pro forma for announced acquisition ** As ofDecember 31, 2019 Financial Metric - Selected Regional Banks 25th Percentile Mean Median 75th Percentile Price to 2019E EPS 12.6x 14.7x 14.5x 16.2x Price to 2020E EPS 12.9x 14.3x 14.4x 15.9x Price to TBVPS 1.54x 1.90x 2.01x 2.12x ROATCE 11.4% 12.8% 13.7% 15.0% Financial Metric - Selected National Banks 25th Percentile Mean Median 75th Percentile Price to 2019E EPS 10.4x 15.2x 11.6x 12.7x Price to 2020E EPS 9.9x 12.6x 11.1x 12.0x Price to TBVPS 1.08x 1.24x 1.27x 1.42x ROATCE 8.7% 10.2% 10.7% 12.2%
2. The disclosure under the heading "The Merger-Opinion of Franklin's Financial
Advisor -Franklin Analyses - Selected Public Company Regression Analysis" is hereby amended by deleting the first paragraph under this heading and replacing it with the paragraph below:
Evercore performed a regression analysis using the price to TBVPS multiples for the Franklin selected companies compared to the calendar year 2020 estimated ROATCE, in each case calculated by Evercore as described above under "-Franklin Analyses-Selected Public Company Trading Analysis," to derive a regression line reflecting a range of price to TBVPS multiples at a range of calendar year 2020 estimated ROATCE for the Franklin selected companies. As noted above, the 2020 estimated ROATCE for those Franklin selected companies ranged from 7.3% to 16.4%, with a median of 13.7%, for the selected regional banks, and ranged from 4.7% to 13.1%, with a median of 10.7%, for the selected national banks, as compared to the 2020 estimated ROATCE for Franklin of 10.5%, based on the Franklin Financial Forecasts. -------------------------------------------------------------------------------- 3. The disclosure under the heading "The Merger-Opinion of Franklin's Financial
Advisor -Franklin Analyses - Selected Transaction Analysis" is hereby amended by deleting everything (including the tables) under this heading before the paragraph that begins with "Based on the multiples it derived from the selected transactions…" in page 82 of the joint proxy statement/prospectus, and replacing them with the paragraphs and the tables below:
Evercore reviewed, to the extent publicly available, financial information
related to 17 selected transactions involving publicly-traded target bank
holding companies announced since
For each selected transaction, Evercore calculated the announced transaction value (defined as the target company's implied equity value based on the consideration paid in the applicable transaction) as a multiple of last twelve-month EPS, next twelve-month EPS, and tangible book value, referred to below to as "LTM EPS," "NTM EPS" and "TBV," respectively, for the target company at the time of the announcement of the applicable transaction. Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. For each selected transaction, Evercore also calculated the premiums paid as the percentage by which the per share consideration paid or proposed to be paid in each such transaction exceeded the closing market prices per share of the target companies one day prior to the announcement of each transaction, and the amount by which the per share consideration paid or proposed to be paid in each transaction exceeded the 30-day average and 90-day average closing stock price of the target company prior to the announcement of each transaction.
The selected transactions reviewed by Evercore, including the date on which each was announced, and the results of this analysis were as follows:
Financial Metric - Premiums Paid Equity Value to
Date Announced Acquiror Target LTM EPS NTM EPS TBV 1 Day Prior 30-Day 90-Day
Average Average Independent Bank Texas Capital 12/9/2019 Group, Inc. Bancshares, 9.9x 10.8x 1.19x 5.6% 4.9% 8.7% Inc. United Carolina 11/18/2019 Bancshares, Inc. Financial 16.3x 15.3x 2.07x 15.7% 5.8% 21.5% Corporation First Horizon IberiaBank 11/4/2019 National Corporation 9.7x 10.9x 1.42x 0.0% 0.1% 0.6% Corporation 10/29/2019 Northwest MutualFirst 16.0x 16.1x 1.78x 25.7% 4.6% 32.3% Bancshares, Inc. Financial, Inc. 9/24/2019 Sandy Spring Revere Bank 14.8x 13.0x 1.73x 27.9% 6.1% 9.0% Bancorp, Inc. First Defiance United 9/9/2019 Financial Corp. Community 12.5x 11.1x 1.60x 1.8% (10.9)% (8.1)% Financial Corp. 8/13/2019 CIT Group Inc. Mutual of Omaha 10.9x NA 1.25x NA NA NA Bank Simmons First The Landrum 7/31/2019 National Company 14.3x NA 1.81x NA NA NA Corporation Old Line 7/23/2019 WesBanco, Inc. Bancshares, 14.0x 13.0x 1.77x 12.7% 3.2% 6.1% Inc.
--------------------------------------------------------------------------------
People's United United 7/15/2019 Financial, Inc. Financial 13.2x 14.1x 1.25x 4.5% 8.8% 10.0% Bancorp, Inc.
Puerto Rico
Bancorp
Prosperity Legacy Texas 6/17/2019 Bancshares, Inc. Financial 12.7x 12.8x 2.16x 9.3% (0.1)% 1.2% Group, Inc.
S.A. Bank
Inc. TCF Financial Chemical 1/28/2019 Corporation Financial 10.8x 11.2x 1.62x 0.0% 3.1% 2.1% Corporation "NA" means not available Financial Metric 25th Percentile Mean Median 75th Percentile Equity Value to LTM EPS 10.8x 12.7x 13.2x 14.6x Equity Value to NTM EPS 11.0x 12.9x 12.9x 15.0x Equity Value to TBV 1.25x 1.61x 1.61x 1.79x 1 Day 30-Day 90-Day Prior Average Average 25th Percentile 0.8% (2.0)% (0.5)% Median 6.3% 3.2% 4.1% Mean 9.2% 1.2% 6.3% 75th Percentile 15.0% 5.6% 9.7%
4. The disclosure under the heading "The Merger-Opinion of Franklin's Financial
Advisor -Franklin Analyses - Selected Transactions - Premiums Paid Analysis" is hereby amended by (a) deleting the section heading, the first paragraph under this heading and the premiums paid analysis table after the first paragraph, as this information has been consolidated and moved under the heading "The Merger-Opinion of Franklin's Financial Advisor -Franklin Analyses - Selected Transaction Analysis" per Section 3 above, and (b) revising the first sentence of the second paragraph under this heading as follows:
Based on the premiums paid it derived from the selected transactions and based
on its professional judgment and experience, Evercore applied a premium range of
0.0% to 15.0% to the closing price per share of Franklin common stock of
5. The disclosure under the heading "The Merger-Opinion of Franklin's Financial
Advisor - FB Financial Analyses - Selected Public Company Trading Analysis" is hereby amended by deleting everything (including the tables) under this heading before the paragraph that begins with "Based on the multiples it derived for the FB Financial selected companies…" in page 84 of the joint proxy statement/prospectus, and replacing them with the paragraphs and the tables below:
Evercore reviewed and compared certain financial information of FB Financial to
corresponding financial multiples and ratios for selected bank holding companies
publicly traded on NASDAQ, the
For each of the FB Financial selected companies, Evercore calculated the closing
price per share of the company's common stock as of
Financial Metric Price to Price to Price to 2019 EPS 2020 EPS TBVPS - ROATCE 9/30/2019 Carter Bank & Trust 18.9x 16.2x 1.33x 7.8% Capital City Bank Group, Inc. 16.4x 15.9x 2.06x 12.2% City Holding Company 15.2x 15.8x 2.53x 15.2% First Bancorp 12.1x 12.6x 1.95x 14.5% Franklin 17.7x 12.3x 1.30x 10.4% HomeTrust Bancshares, Inc. 18.2x 17.1x 1.23x 7.3%
Seacoast Banking Corporation of Florida 15.6x 15.1x 2.11x 12.9% ServisFirst Bancshares, Inc.
13.8x 13.7x 2.49x 16.4%
Southern National Bancorp of Virginia, Inc. 10.8x 12.3x 1.46x 11.2% The First Bancshares, Inc.*
12.2x 11.0x 1.76x 15.6% * TBVPS pro forma for announced acquisition Financial Metric - Regional Banks 25th Percentile Mean Median 75th Percentile Price to 2019E EPS 12.6x 15.1x 15.4x 17.4x Price to 2020E EPS 12.4x 14.2x 14.4x 15.9x Price to TBVPS - 9/30/2019 1.37x 1.82x 1.86x 2.10x ROATCE 10.6% 12.4% 12.5% 15.0%
6. The disclosure under the heading "The Merger-Opinion of Franklin's Financial
Advisor - FB Financial Analyses - Selected Public Company Regression Analysis" is hereby amended by deleting the first paragraph under this heading and replacing it with the paragraph below:
Evercore performed a regression analysis using the price to TBVPS multiples for the FB Financial selected companies compared to the calendar year 2020 estimated ROATCE, in each case calculated as described above under "-FB Financial Analyses - Selected Public Company Trading Analysis," to derive a regression line reflecting a range of price to TBVPS multiples at a range of calendar year 2020 estimated ROATCE for the FB Financial selected companies. As noted above, the 2020 estimated ROATCE for those FB Financial selected companies ranged from 7.3% to 16.4%, with a median of 12.5%, as compared to the 2020 estimated ROATCE for FB Financial of 14.5%, based on the FB Financial Forecasts. -------------------------------------------------------------------------------- IMPORTANT INFORMATION FOR SHAREHOLDERS AND INVESTORS
In connection with the proposed merger, FB Financial filed with the
PARTICIPANTS IN THE SOLICITATION
Franklin, FB Financial, and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
Franklin's and FB Financial's shareholders in connection with the proposed
merger under the rules of the
FORWARD-LOOKING STATEMENTS
Certain statements contained in this report may constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements include, without limitation, statements
relating to the timing, benefits, costs, and synergies of the proposed merger
with FB Financial (which we refer to as the "FB Financial merger"), and
Franklin's and FB Financial's future plans, results, strategies, and
expectations. These statements can generally be identified by the use of the
words and phrases "may," "will," "should," "could," "would," "goal," "plan,"
"potential," "estimate," "project," "believe," "intend," "anticipate," "expect,"
"target," "aim," "predict," "continue," "seek," "projection," and other
variations of such words and phrases and similar expressions. These
forward-looking statements are not historical facts, and are based upon current
expectations, estimates, and projections, many of which, by their nature, are
inherently uncertain and beyond Franklin's or FB Financial's control. The
inclusion of these forward-looking statements should not be regarded as a
representation by Franklin, FB Financial or any other person that such
expectations, estimates, and projections will be achieved. Accordingly, Franklin
and FB Financial caution shareholders and investors that any such
forward-looking statements are not guarantees of future performance and are
subject to risks, assumptions, and uncertainties that are difficult to predict.
Actual results may prove to be materially different from the results expressed
or implied by the forward-looking statements. A number of factors could cause
actual results to differ materially from those contemplated by the
forward-looking statements including, without limitation, (1) the risk that the
cost savings and any revenue synergies from the proposed FB Financial merger may
not be realized or may take longer than anticipated to be realized, (2)
disruption from the proposed FB Financial merger with customer, supplier, or
employee relationships, (3) the occurrence of any event, change, or other
circumstances that could give rise to the termination of the merger agreement
with FB Financial, (4) the failure to obtain necessary regulatory approvals for
the FB Financial merger, (5) the failure to obtain the approval of Franklin's
and FB Financial's shareholders in connection with the FB Financial merger, (6)
the possibility that the costs, fees, expenses, and charges related to the FB
Financial merger may be greater than anticipated, including as a result of
unexpected or unknown factors, events, or liabilities, (7) the failure of the
conditions to the FB Financial merger to be satisfied, (8) the risks related to
the integration of the combined businesses (as well as FB Financial's pending
acquisition of
Franklin and FB Financial qualifies all of their forward-looking statements by these cautionary statements. --------------------------------------------------------------------------------
© Edgar Online, source