Home BancShares, Inc. (NASDAQ: HOMB) (“Home BancShares” or "HOMB"),
the parent company of Centennial Bank, and Happy Bancshares, Inc.
(“Happy Bancshares”), the parent company of Happy State Bank,
jointly announced today that they have entered into a definitive
merger agreement pursuant to which Home BancShares will acquire
Happy Bancshares in an all-stock merger, with Home BancShares as
the surviving entity.
The combination grants Home BancShares access to
the high growth Texas market and establishes the combined entity as
a dominant Southern institution with the opportunity to leverage
each company’s track record of performance, integration and
leadership. The combination positions Home BancShares to expand
further into Texas and potentially acquire additional institutions
over time.
Under the terms of the definitive merger
agreement, which was unanimously approved by the Boards of
directors of both companies, Happy Bancshares shareholders upon
closing of the merger will receive 2.17 shares of Home BancShares
stock for each share of Happy Bancshares they own and will begin
receiving quarterly dividends declared by Home BancShares. Based on
a volume-weighted average closing price per share of Home
BancShares stock of $21.77 during the 20-trading-day period ending
on September 13, 2021, the per share consideration value is $47.24
and the aggregate transaction value is approximately $919
million.
The transaction is consistent with Home
BancShares’ M&A track record and is expected to be immediately
triple accretive: resulting in increases to earnings per share of
5.5%1 and 9.2%1 for 2022 and 2023, respectively; book value per
share of 5.1%2 and tangible book value per share of 1.5%2.
Following the completion of this transaction, Home BancShares will
continue to have a robust capital position along with an improved
operating profile. The pro forma bank will be approximately $23.3
billion2 in assets, $13.4 billion2 in loans and $18.7 billion2 in
deposits and will be one of the 75 largest banks headquartered in
the United States3.
Home BancShares will continue to be
headquartered in Conway, Arkansas and operate as Centennial Bank in
its current markets. As part of the transaction, Home BancShares
will add J. Pat Hickman, current Happy Bancshares Chairman, to its
Board of Directors. Happy Bancshares CEO, Mikel Williamson will
join the Centennial Bank executive team while additional Happy
State Bank executives are to maintain leadership roles in Texas
markets. Following completion of the merger, branches located in
Texas will be branded Happy State Bank, a Division of Centennial
Bank.
“Happy State Bank is excited to join forces with
one of the top-performing banks in the country,” said J. Pat
Hickman, Chairman of Happy Bancshares. “Centennial Bank is one of
the few banks that has grown even faster and stronger than Happy,
and with a similar mix of serving both small towns and metropolitan
areas, they check every box when it comes to taking care of
customers, stockholders and employees. It’s just a great match. I
have to say it…we’re happy to be joining the HOMB team.”
John Allison, Co-Founder, Chairman, President
and CEO of Home BancShares, stated, “We have expressed our desire
to return to Texas for several years. We are thrilled to have found
such a quality bank to partner with to make this expansion a
reality. As strong as HOMB’s loan yield is, Happy’s is even
stronger. Combine that with joining forces with their founder, J.
Pat Hickman, quality employees and 1,300 loyal individual
shareholders, makes this a very attractive combination. Making a
‘triple accretive’ transaction, with no earn-back period (which
includes $55 million in deal costs plus $28 million to be taken
immediately after close reflective of the CECL "double count") and
now being in two of the best growth markets in the U.S. (Texas and
Florida) should reap strong returns for our shareholders.”
“Centennial is one of the best banks in the
country and Happy is one of the best banks in Texas when it comes
to taking care of their stockholders, customers, employees and
communities. It’s exciting to see two great community banks with
great cultures join forces,” added Mikel Williamson, President and
CEO of Happy State Bank.
The merger is expected to close early in the
first quarter of 2022, subject to satisfaction of customary closing
conditions, including customary regulatory approvals and approval
by the shareholders of each company.
Piper Sandler served as the financial advisor to
Home BancShares and provided a fairness opinion, with Mitchell,
Williams, Selig, Gates & Woodyard serving as legal advisor.
Stephens Inc. served as financial advisor to Happy Bancshares and
provided a fairness opinion, with Alston & Bird serving as
legal advisor.
1 Assumes 75% realization of cost savings in 2022 and
full realization of cost savings in 2023 2 Estimates are based on
12/31/21 projections 3 By deposit market share. Source S&P
Global Market Intelligence
Conference Call &
Presentation
Management will conduct a conference call to
review this information at 1:00 p.m. CT (2:00 ET) on Wednesday,
September 15, 2021. We encourage all participants to pre-register
for the conference call using the following link:
https://dpregister.com/sreg/10160040/ed0711ac98. Callers who
pre-register will be given dial-in instructions and a unique PIN to
gain immediate access to the live call. Participants may
pre-register now, or at any time prior to the call, and will
immediately receive simple instructions via email. The Home
BancShares conference call will also be automatically scheduled as
an event in your Outlook calendar.
Those without internet access or unable to
pre-register may dial in and listen to the live call by calling
1-877-508-9586 and asking for the Home BancShares conference call.
A replay of the call will be available by calling 1-877-344-7529,
Passcode: 10160040, which will be available until September 22,
2021 at 10:59 p.m. CT (11:59 ET). Internet access to the call will
be available live or in recorded version on the Company's website
at www.homebancshares.com under “Investor Relations” for 12
months.
Additional information regarding the acquisition
is provided in a supplemental presentation available on the
Company's website at www.homebancshares.com, under the “Investor
Relations” section.
About Home BancShares
Home BancShares operates as the bank holding
company for Centennial Bank that provides commercial and retail
banking, and related financial services to businesses, real estate
developers and investors, individuals, and municipalities.
Centennial Bank has branch locations in Arkansas, Florida, South
Alabama and New York City. The Company's common stock is traded
through the NASDAQ Global Select Market under the symbol “HOMB.”
The company was founded in 1998 and is headquartered in Conway,
Arkansas. Visit www.homebancshares.com or www.my100bank.com for
more information.
About Happy Bancshares
Happy Bancshares operates as the bank holding
company for Happy State Bank that offers a broad range of financial
services and products through its current network of bank branches
in communities across the Texas Panhandle, South Plains, Austin,
Central Texas and the Dallas/Fort Worth Metroplex. Happy State Bank
was founded in 1908 in Happy, Texas and today is headquartered in
Amarillo, Texas. Visit www.HappyBank.com for more information.
Forward-Looking Statements
This release contains forward-looking statements
which include, but are not limited to, statements about the
benefits of the business combination transaction involving Home
BancShares, Inc. (“Home”) and Happy Bancshares, Inc. (“Happy”),
including the combined company’s future financial and operating
results, plans, expectations, goals and outlook for the future.
Statements in this press release that are not historical facts
should be considered forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements of this type speak only as of the date
of this press release. By nature, forward-looking statements
involve inherent risk and uncertainties. Various factors could
cause actual results to differ materially from those contemplated
by the forward-looking statements, including, but not limited to,
(i) the possibility that the acquisition does not close when
expected or at all because required regulatory, shareholder or
other approvals and other conditions to closing are not received or
satisfied on a timely basis or at all; (ii) the possibility that
the transaction may be more expensive to complete than anticipated,
including as a result of unexpected factors or events; (iii) the
risk that the benefits from the transaction may not be fully
realized or may take longer to realize than expected, including as
a result of changes in general economic and market conditions,
ongoing or future effects of the COVID-19 pandemic, interest and
exchange rates, monetary policy, laws and regulations and their
enforcement, and the degree of competition in the geographic and
business areas in which Home and Happy operate; (iv) the ability to
promptly and effectively integrate the businesses of Home and
Happy; (v) the reaction to the transaction of the companies’
customers, employees and counterparties; and (vi) diversion of
management time on acquisition-related issues. Additional
information on factors that might affect Home’s financial results
is included in its Annual Report on Form 10-K for the year ended
December 31, 2020, filed with the SEC on February 26, 2021. Home
assumes no obligation to update the information in this press
release, except as otherwise required by law.
Additional Important Information and
Where to Find It
This press release may be deemed to be
solicitation material in respect of the proposed transaction by
Home and Happy. In connection with the proposed acquisition, Home
intends to file with the Securities and Exchange Commission (the
“SEC”) a Registration Statement on Form S-4 (the “Registration
Statement”) to register the shares of Home common stock to be
issued to shareholders of Happy in connection with the transaction.
The Registration Statement will include a Joint Proxy Statement of
Home and Happy and a Prospectus of Home, as well as other relevant
materials regarding the proposed merger transaction involving Home
and Happy. INVESTORS AND SECURITY HOLDERS OF HOME AND HAPPY ARE
ADVISED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT
BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE
JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER TRANSACTION.
Investors and security holders may obtain free copies of these
documents, once they are filed, and other documents filed with the
SEC on the SEC’s website at http://www.sec.gov. Investors and
security holders may also obtain free copies of the documents filed
with the SEC by Home at Home’s website at
http://www.homebancshares.com, Investor Relations, or by contacting
Donna Townsell, by telephone at (501) 328-4625.
Participants in Solicitation
Home and Happy and certain of their directors
and executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Home and Happy in
connection with the merger transaction. Information about the
directors and executive officers of Home and their ownership of
Home common stock is set forth in the proxy statement for Home’s
2021 Annual Meeting of Shareholders, as filed with the SEC on
Schedule 14A on March 2, 2021. Information about the directors and
executive officers of Happy and their ownership of Happy common
stock will be set forth in the Joint Proxy Statement/Prospectus to
be included in the Registration Statement. Additional information
regarding the interests of those participants and other persons who
may be deemed participants in the transaction may be obtained by
reading the Joint Proxy Statement/Prospectus regarding the merger
transaction. Free copies of this document may be obtained as
described in the preceding paragraph when it becomes available.
Investor Contact Donna Townsell
Director of Investor Relations Home BancShares, Inc. (501)
328-4625
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