Old National Bancorp and CapStar Financial Holdings, Inc. jointly announced last week that they have entered into a merger agreement for Old National to acquire CapStar in an all-stock transaction. Combining the two organizations will strengthen Old National’s recently formed Nashville presence and add several new high-growth markets.
Old National entered the Tennessee market in 2022 when it introduced a Nashville-based 1834 Wealth team (Old National’s high-net-worth division). More recently, Old National added a Nashville-based commercial banking and lending team. The combination with CapStar accelerates Old National’s Tennessee presence bringing $3.3 billion in total assets, $2.3 billion in total loans, and $2.8 billion in deposits as of September 30, 2023, with top-10 deposit market share in the Nashville MSA and recent entry into Asheville, North Carolina.
“This partnership with CapStar – one of the most highly respected and successful community banks in Tennessee – is a tremendous cultural fit and a natural extension of our growth strategy,” said Old National CEO Jim Ryan. “By establishing a full-service banking presence in Nashville and several other strong Tennessee and North Carolina communities, we can more fully serve our existing Nashville-area clients while also introducing our client- and community-focused brand of banking to the surrounding region.”
“Over the past five years, our team has repositioned CapStar, strengthening its performance and long-term prospects,” said Timothy K. Schools, CapStar President and Chief Executive Officer. “In looking to the next five years, it is my belief Old National’s like-minded culture and scale best positions our employees, customers, and shareholders to continue our positive momentum.
. CapStar’s financial performance ranks first among all Tennessee-based banks and fourth across the Southeast within S&P Global Market Intelligence’s ranking of banks with assets of $3 to $10 billion. Additionally, CapStar has been recognized as the highest-performing publicly traded Tennessee-based bank by Bank Director each of the past three years.
The partnership transaction includes 23 total banking centers, including two in Wayne County. Under the terms of the merger agreement, each outstanding share of CapStar common stock will be converted into the right to receive 1.155 shares of Old National common stock, valuing the transaction at approximately $344.4 million, or $16.64 per share, based on Old National’s 30-day volume weighted average closing stock price ending October 25, 2023.
The definitive merger agreement has been approved by the Board of Directors of each company. The transaction remains subject to regulatory approval and the vote of CapStar shareholders. The transaction is anticipated to close in the second quarter of 2024.
Representatives from CapStar Bank in Waynesboro said that they had no comment at this time, but they will make the official announcement of the merger and the changes to be made at the Waynesboro and Collinwood locations as soon as regulatory approval has been obtained.
