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 Sept. 30, 2023, with top-10 deposit market share in the Nashville MSA and recent entry into Asheville, NC.
“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,” Jim Ryan, CEO of Old National, said. “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,” Timothy K. Schools, president and CEO of CapStar, said. “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. Excitingly, CapStar employees will be a major contributor to strengthen Old National’s recent entry into Nashville. Old National has hired market-leading individuals we are well familiar with, and shareholders greatly benefit from a material increase in dividends and daily trading volume while receiving a very attractively priced stock with strong potential for upside.”
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 Oct. 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.
Keefe, Bruyette & Woods, a Stifel company, served as financial advisor and Dykema Gossett acted as legal advisor to Old National.
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