Bank merger expected to be complete by summer

0
The Entegra Bank branches are slated to be sold prior to the merger with First Citizens. Until the merger, the branches will be open and operating. The agreement calls for the branches to continue to operate as banks even after the merger, but under a different name. photo by Vickie Carpenter

Brittney Lofthouse – Contributing Writer

Customers logging onto their Entegra Bank (formerly Macon Bank) online accounts on Monday were met with an update notice regarding the company’s merger with First Citizens BancShares, Inc. Entegra Financial Corp. 

Entegra Bank announced Monday that a letter of agreement (LOA) was signed with the Department of Justice (DOJ) that required three Entegra Branch locations to be sold to a different buyer prior to receiving approval for the merger with First Citizens Bank. 

“In connection with obtaining clearance of the transaction from the DOJ, the LOA requires that the parties divest three Entegra Bank branches located in Western North Carolina: Holly Springs (30 Hyatt Road, Franklin, NC), Highlands (473 Carolina Way, Highlands, NC) and Sylva (498 East Main, Sylva, NC) (collectively, the “Divestiture Branches” or the “Divestiture”) and enter into a sale agreement for the Divestiture Branches with a buyer approved by the DOJ (the “Divestiture Buyer”) prior to the close of the Merger,” read the announcement. 

Roger Plemmons, CEO of Entegra Bank said on Tuesday that the DOJ selected the branches that had to be sold and it will likely be four or five months before any changes are made as a result of Monday’s announcement. 

Both banks are in the process of securing approvals from the federal and state bank regulatory agencies. The banks hope to identify an approved buyer for the three identified branches and close the merger between First Citizens and Entegra as soon as practicable, and, following closing of the merger, the divestiture branches will continue to be operated as they are currently being operated until closing of the divestiture, which must occur within 180 days after the closing of the merger. 

Plemmons said that any existing Entegra Bank locations will continue to operate under the Entegra Bank for several months after the merger during a transition phase but eventually they will be switched to First Citizens Bank. Plemmons expects the process to be complete by next summer. 

On Jan. 15, Entegra originally announced it had entered into an agreement to combine with SmartFinancial Inc. in a strategic merger of equals, in which each share of Entegra common stock would be converted into 1.215 share of SmartFinancial common stock. However, based on the closing price of SmartFinancial’s common stock of $18.40 on Jan. 14, this implied a transaction value of $22.36 per share, or approximately $158.2 million. First Citizens Bank then approached Entegra and its advisors with a considerably higher price to acquire the company. 

Under the terms of its definitive agreement with SmartFinancial, the board of directors of Entegra exercised its right to enter into discussions with First Citizens Bank. Ultimately, the board determined that the case consideration offer of $30.18 from First Citizens Bank was a superior proposal to the agreement with SmartFinancial, and pursuant to its fiduciary duties and, as permitted under its agreement with SmartFinancial, entered into an agreement with First Citizens Bank. Under the terms of the First Citizens Bank agreement with Entegra, First Citizens was required to pay a termination fee of $6.4 million to SmartFinancial on behalf of Entegra, which Entegra was obligated to pay under its agreement with SmartFinancial upon the termination of that agreement by Entegra.

At the end of last year, Entegra reported $1.6 billion in consolidated assets, $1.2 billion in deposits and $1.1 billion in loans. The bank has 18 offices and two loan production offices throughout western North Carolina, upstate South Carolina and north Georgia.

SHARE
Previous articleArrests for December 5, 2019
Next articleSafe Kids Commentary
Avatar
Free Independent Weekly Newspaper - Distributed in Franklin, Highlands, Dillsboro, Webster, Cullowhee, Scaly Mountain, N.C.; Dillard & Clayton, Ga.

LEAVE A REPLY