Home BancShares' $150M Gambit for Tennessee's High-Growth Markets

CONWAY, AR & KNOXVILLE, TN – December 08, 2025 – In a strategic move signaling aggressive expansion into one of the nation's most dynamic economic corridors, Home BancShares, Inc. today announced a definitive agreement to acquire Mountain Commerce Bancorp, Inc. in an all-stock transaction valued at approximately $150.1 million. The deal unites the Conway, Arkansas-based parent of Centennial Bank with the Knoxville-based parent of Mountain Commerce Bank, creating a pro forma banking powerhouse with roughly $25.0 billion in assets and a new, formidable presence in Tennessee's key growth markets.

This acquisition is more than a simple line-item on a balance sheet; it's a meticulously crafted entry into the Knoxville, Nashville, and Johnson City metropolitan statistical areas (MSAs). For Home BancShares (NYSE: HOMB), this is a calculated play to plant its flag in fertile ground, leveraging Mountain Commerce's established local presence as a launchpad for future growth in the Volunteer State.

A Calculated Bet on Tennessee's Growth Engine

The strategic foundation of this merger rests on the undeniable economic and demographic momentum of Tennessee. Home BancShares' leadership has explicitly identified the state as a prime target for expansion, with Chairman, President, and CEO John Allison placing it in an elite tier alongside Texas and Florida. "Tennessee is a great state," Allison stated, underscoring the strategic imperative behind the move.

The data supports this bullish outlook. The press release highlights a forecast from moveBuddha ranking Knoxville as the number one most popular city to move to in 2026, a testament to its blend of Southern charm, vibrant university culture, and appealing quality of life at the foot of the Great Smoky Mountains. This influx of new residents and businesses creates a surging demand for banking services that a larger, well-capitalized institution like the combined Centennial Bank is poised to meet.

While Knoxville grabs headlines, the broader strategy encompasses the entire region. Nashville continues its reign as a national beacon of growth, driven by its robust healthcare and entertainment industries. Johnson City, part of the Tri-Cities region, provides a stable, growing market where Mountain Commerce already has deep roots and plans for further expansion with a new branch opening in early 2026. By acquiring Mountain Commerce Bancorp (OTCQX: MCBI), Home BancShares isn't just buying assets; it's buying immediate access and local credibility across a spectrum of Tennessee's most promising economic zones. This move allows the bank to tap into a thriving ecosystem of small and medium-sized businesses, professionals, and affluent individuals that have long been Mountain Commerce's core clientele.

The 'Triple Accretive' Blueprint for Growth

A hallmark of Home BancShares' long-term strategy is its disciplined approach to mergers and acquisitions, focusing on deals that provide immediate financial benefits. This transaction is no exception, with the company projecting it to be "triple accretive"—simultaneously boosting earnings per share (EPS), book value per share, and tangible book value per share upon closing.

Specifically, the acquisition is expected to lift EPS by 1.4% in 2026 and 3.0% in 2027, while also increasing book value per share by 0.7% and tangible book value per share by 0.2%. This financial engineering is not new for the Arkansas-based bank. Its 2022 acquisition of Texas-based Happy Bancshares was similarly structured, demonstrating a repeatable M&A blueprint that emphasizes shareholder value creation from day one. By consistently executing these accretive deals, Home BancShares has built a track record of successfully integrating new banks while strengthening its overall financial position.

Under the terms of the agreement, Mountain Commerce shareholders will receive 0.850 shares of HOMB stock for each MCBI share they own, valuing each share at an implied $23.51 based on Home BancShares' recent trading average. This all-stock structure aligns the interests of both shareholder groups and provides Mountain Commerce investors with a stake in a larger, more diversified, and highly profitable banking institution that pays a regular quarterly dividend. The resulting pro forma bank, with approximately $17.0 billion in loans and $19.2 billion in deposits, will rank among the 75 largest banks headquartered in the United States, providing significant scale and operating leverage.

Integrating a Community Pillar

While the financial metrics are compelling, the long-term success of the merger will hinge on the effective integration of two distinct banking cultures. Mountain Commerce Bank has built its reputation over a century as a quintessential community institution, focused on "responsive relationship banking" for local businesses and individuals who value personal service. Preserving this legacy while introducing the resources of a much larger parent company presents both an opportunity and a challenge.

Home BancShares appears keenly aware of this dynamic. The decision to have William E. "Bill" Edwards, III, the founder and CEO of Mountain Commerce, and his team lead the charge for Centennial Bank in Tennessee is a critical strategic choice. It signals a commitment to retaining local leadership and expertise, which is essential for maintaining customer trust and employee morale during the transition.

"This partnership provides resources, through HOMB’s strong balance sheet and capital position, to allow our talented team of bankers to flourish," said Edwards. His statement reflects an optimism that the merger will empower, rather than subsume, the local team. For Mountain Commerce customers, the promise is access to a broader suite of products, higher lending limits, and advanced digital banking technologies, all while ideally retaining the familiar faces and local decision-making they have come to expect. The challenge for Home BancShares will be to deliver on this promise, ensuring that the integration process enhances the customer experience rather than disrupting it.

Navigating the Path to Completion

The transaction, unanimously approved by both boards of directors, is now set to navigate the customary path of regulatory and shareholder approvals. The merger is expected to close in the first half of 2026, a timeline that suggests confidence in a relatively straightforward review process.

The primary regulatory bodies, including the Federal Reserve and the FDIC, will assess the deal's impact on financial stability, competition, and community reinvestment. Given the minimal geographic overlap between Centennial Bank's existing footprint and Mountain Commerce's Tennessee-centric operations, significant anti-trust concerns are unlikely. The focus will likely be on ensuring the combined entity remains well-capitalized and that both banks have satisfactory records under the Community Reinvestment Act (CRA), which encourages banks to meet the credit needs of their local communities.

With a long and successful history of acquiring and integrating banks across multiple states—from its initial consolidations in Arkansas to major expansions in Florida and Texas—Home BancShares has developed a sophisticated understanding of the regulatory landscape. This experience should prove invaluable in steering the Mountain Commerce acquisition to a successful close. Once complete, the deal will not only reshape the banking landscape in East and Middle Tennessee but also solidify Home BancShares' reputation as one of the most strategic and effective acquirers in the regional banking sector.

This move is a clear statement of intent, positioning the bank to capitalize on regional demographic shifts and setting the stage for what could be a new phase of growth and consolidation across the Southeast.