News Column

Asheville lender signs deal to acquire Jefferson Federal

January 23, 2014

By Josh Flory, The Knoxville News-Sentinel, Tenn.

Jan. 23 --An Asheville, N.C. banking company has agreed to acquire the parent company of Jefferson Federal Bank , the Morristown lender that has operations in Knoxville . HomeTrust Bancshares said Thursday that it had signed a definitive agreement to acquire Jefferson Bancshares for $51.2 million . Shareholders of Jefferson, which is traded on the Nasdaq exchange, will receive $8 per share, half in cash and half in HomeTrust stock. Anderson Smith , president and CEO of Jefferson, will serve as East Tennessee Market President for HomeTrust and as a member of its board. Smith said the two companies have similar cultures, and said it's possible the deal could lead to more local branches for the company. He said that over the long term, "what you look at in these combinations is the ability to continue to serve your communities. And with a large combined organization, those opportunities will increase both in the product menu and the ability to do lending in your communities." Smith said another contributing factor was the regulatory burden facing banks in recent years. "Larger banks, of course, have a larger revenue base over which to spread the increased expenses," he said. "And conversely, the smaller banks basically have the same requirements but they have smaller revenue bases." HomeTrust Bank's divisions include Tryon Federal Bank , Shelby Savings Bank and Home Savings Bank , and the company had $1.7 billion in assets as of September 30 , making it about three times larger than Jefferson, which had assets of nearly $499 million . HomeTrust has 21 offices in North and South Carolina . Jefferson Federal has offices in Hamblen County , Knoxville and the Tri-Cities region. While its share of deposits in Knox County is only 0.33 percent, Jefferson Federal is the leading bank in Hamblen County , by market share, with more than 23 percent of deposits. Jefferson Bancshares reported a profit of $498,000 in the third quarter, and profits of $1.6 million for the year ended June 30 . In the prior year, the company lost $4 million . "We are enthusiastic to enter the East Tennessee market by connecting with an institution sharing our core values," Dana Stonestreet , the chairman, president and CEO of HomeTrust said in the release. "Both banking organizations are dedicated to providing superior customer service, placing value on their employees, and focusing continually on creating shareholder value." ___ (c)2014 the Knoxville News-Sentinel (Knoxville, Tenn.) Visit the Knoxville News-Sentinel (Knoxville, Tenn.) at Distributed by MCT Information Services

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Source: Knoxville News-Sentinel (TN)

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