WNC Entegra branches to close during merger
A merger between Macon County-based Entegra Bank and First-Citizens Bank is moving forward, but under the condition that Entegra will sell off three of its branches in Western North Carolina.
On Dec. 2, First-Citizens and Entegra Bank entered into a letter of agreement with the Department of Justice’s Antitrust Division regarding the merger. In obtaining clearance for the transaction, the letter of agreement requires that the parties divest the Entegra Bank branches in Franklin, Highlands and Sylva and enter into a sale agreement for the divestiture branches with a buyer approved by the DOJ before the merger is complete.
According to a press release, the parties may not exclude any customer relationships from the divestiture unless expressly agreed upon with the DOJ. The parties must work to preserve the operation of the divested branches and not do anything to impede the operations of the three branches, including not taking any action that would cause a decrease in the number of customers at the branches prior to divestiture, the release stated.
“The Parties and the DOJ want all employees at the Divestiture Branches to stay with their branch and continue to serve customers as usual through the consummation of the Divestiture,” the release stated. “In fact, the LOA prohibits the Parties from transferring employees such as branch managers, assistant branch managers, or loan officers away from any Divestiture Branch.”
In accordance with the letter of agreement, Entegra and First Citizens will provide information to help facilitate the transition of employees at the three said branches to the divestiture buyer, and the parties hope that all branch employees will be employed by the future buyer.
Entegra and First Citizens are seeking approvals from the federal and state bank regulatory agencies and hope to identify an approved divestiture buyer and close the merger as soon as practicable. Following closure of the merger, the three divested branches will continue to be operated as they are currently being operated until the divestiture transaction is complete, which must occur within 180 days after the closing of the merger.
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Entegra announced the merger with Raleigh-based First Citizens back in May, but originally had plans to merge with SmartFinancial out of Knoxville. On Jan. 15, Entegra announced it had entered into a definitive agreement to merge with SmartFinancial in a strategic merger of equals. However, First Citizens approached Entegra and its advisors with a significantly better offer after the announcement was made. According to a press release, under the agreement with SmartFinancial, Entegra’s Board of Directors exercised its right to enter into discussions with First Citizens and ultimately determined that the cash consideration offer of $30.18 per share was a superior proposal to the agreement with SmartFinancial for $22.36 per share.
Under the terms of the First Citizens Bank agreement with Entegra, First Citizens will pay a termination fee of $6.4 million to SmartFinancial on behalf of Entegra, which Entegra was obligated to pay under its agreement.
First Citizens has over $35 billion in assets and more than 550 branches in 19 states. As of Dec. 31, 2018, Entegra reported $1.6 billion in consolidated assets, $1.2 billion in deposits and $1.1 billion in loans.
Entegra Bank opened in 1922 under the name Macon Bank and is a state-chartered, full-service commercial bank with 18 offices and two loan production offices throughout Western North Carolina, Upstate South Carolina and North Georgia. As the bank grew outside of Macon County and throughout the region, it changed its name to Entegra Bank in 2015. Around the same time, Entegra acquired locally-owned Old Town Bank in Waynesville to the tune of $13.5 million.
Questions or concerns regarding the letter of agreement between Entegra and First Citizens may be directed to 828.524.7000, x.2327) or This email address is being protected from spambots. You need JavaScript enabled to view it..
