SKN | Arkansas Bank to Enter Tennessee in $150.1M Expansion Deal

Home BancShares, the parent company of Centennial Bank, has announced a $150.1 million all-stock acquisition of Tennessee-based Mountain Commerce Bancorp, marking its first entry into the Volunteer State. The move positions the Arkansas lender to broaden its regional footprint and deepen its presence in high-growth banking markets. Once completed, the deal will create a combined institution with approximately $25 billion in assets and a significantly expanded deposit and loan base.

The acquisition is particularly relevant for investors and banking customers as consolidation continues to reshape regional credit markets, interest rate strategies, and digital banking services across the U.S.

A Strategic Move Into High-Value Tennessee Markets

For Conway, Arkansas-based Home BancShares, the acquisition marks a long-anticipated expansion. Centennial Bank currently operates across Arkansas, Florida, Texas, southern Alabama, and New York City — but Tennessee has remained a key missing piece in its geographic growth strategy.

Mountain Commerce Bancorp brings seven branches to the table:
• Four in the Tri-Cities region (Johnson City, Bristol, Kingsport)
• Two in the Knoxville area
• One in a Nashville suburb

The Knoxville-based lender serves small and medium-sized businesses, professionals, and affluent individuals — a customer mix that aligns well with Centennial Bank’s relationship-driven model.

CEO John Allison praised the acquisition as a disciplined and well-timed step. “We waited patiently to make our next acquisition to ensure we partnered with a good quality bank in a strong market,” he said.

Impact on Customers, Deposits, and Lending Capacity

The transaction adds approximately $19.2 billion in deposits and $17 billion in loans to the combined balance sheet, giving Home BancShares greater leverage to compete in commercial lending, mortgages, and small business credit across the Southeast. Customers may also benefit from expanded digital banking capabilities, larger checking account networks, and enhanced loan offerings.

Mountain Commerce’s reputation for responsive, relationship-centered service complements Centennial’s approach — potentially offering greater stability for depositors while strengthening local access to credit.

However, the deal comes amid industry-wide scrutiny of banks holding unrealized securities losses. Allison previously hinted the target bank faced balance-sheet pressures, which the acquisition aims to stabilize through stronger capital support.

Regulatory, Competitive, and Economic Implications

The agreement, expected to close early in the first half of 2026, requires shareholder and regulatory approval. It arrives during a period of heightened M&A activity in Texas and surrounding states, where regional banks are aggressively expanding to gain scale and diversify risk amid fluctuating interest rate conditions.

Home BancShares expects the transaction to be earnings-accretive — boosting EPS by 1.4% in 2026 and 3% in 2027. For investors, these projections support the view that consolidation continues to offer value when cost synergies and deposit stability are achievable.

Closing Insight

As regional banks navigate tighter margins, rising digital banking expectations, and shifting credit demand, acquisitions like this highlight the industry’s push to scale efficiently. For customers, the integration could mean broader access to services and stronger deposit protection. For investors, Tennessee’s economic growth and stable mortgage and commercial lending markets signal long-term opportunity.
Expect more M&A activity ahead as lenders adjust to interest rate uncertainty, competition from fintechs, and evolving regulatory expectations.

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