Knoxville, TN-based SmartBank signed an agreement to acquire Tuscaloosa, AL-based Capstone Bank. Upon the completion of the transaction, the combined company is expected to have assets in excess of $1.5 billion.

“This is a compelling acquisition and we’re excited to partner with Capstone as we look to grow and further expand our footprint in the Southeast,” said SmartBank President and CEO Billy Carroll. “Capstone is a great community bank, and we admire their leadership and the culture they’ve created. Much like our bank, Capstone has a strong history of service to both its customers and local communities and we look forward to building on that together.”

Established in 2007, SmartBank has more than $1 billion in assets and operates 14 branches and two loan production office spanning East Tennessee and the Florida Panhandle. This marks the fourth acquisition in the bank’s past five years.

Capstone Bank was formed in 2008 and has eight locations in Tuscaloosa, Washington and Clarke counties, including a new office in Fairhope, AL. The acquisition, which is subject to customary closing conditions, including the approval of each party’s shareholders and the receipt of all necessary regulatory approvals, is expected to be completed in Q4/17.

The merger agreement provides for the merger of Capstone Bancshares with and into SmartFinancial, with SmartFinancial as the surviving corporation, and the subsequent merger of Capstone Bank with and into SmartBank, with SmartBank as the surviving bank.

The transaction is valued at approximately $84.8 million based on the closing price of SmartFinancial common stock on May 22, 2017.

Raymond James served as financial advisor to SmartFinancial, and SmartFinancial was represented by the law firm Butler Snow. Stephens served as financial advisor to Capstone, and Capstone was represented by the law firm Burr & Forman.