Business

First Citizens announces merger with Entegra

By Lightning Reports, Published: April 24, 2019

First-Citizens Bank & Trust Company and Entegra Financial Corp. announced today the signing of a definitive merger agreement.

The agreement provides for the acquisition of Franklin-based Entegra Financial Corp. by First Citizens Bank, which is headquartered in Raleigh. The announcement was made jointly by Frank B. Holding Jr., chairman and chief executive officer of First Citizens Bank, and Roger Plemens, president and chief executive officer of Entegra.

The announcement came after Entegra had announced an agreement in January in which Tennessee-based SmartFinancial would pay $158 million, or $22.36 per share, for Entegra. First Citizens then bid substantially higher, offering $220 million, or $30.18 per share.

The agreement has been approved by the boards of directors of both companies. The transaction is anticipated to close during the second half of 2019, subject to the receipt of regulatory approvals, the approval of Entegra's shareholders and other closing conditions.

The banks made no announcement about the status of either bank's branches or employees. First Citizens and Entegra have their Hendersonville headquarters in the 500 and 600 blocks of North Main Street, respectively.

Under the terms of the agreement:

• Cash consideration of $30.18 per share will be paid to the shareholders of Entegra for each share of its common stock and for each restricted stock unit after conversion to common stock.
• Each Entegra option will be canceled and each option holder will receive a cash payment.
• No consideration will be paid to First Citizens Bank or its affiliates as a result of their ownership of shares of Entegra's common stock.

As of Wednesday, First Citizens Bank and/or its affiliates own approximately 1.56% of Entegra's outstanding common stock. The total transaction value, including termination fee, is anticipated to be approximately $219.8 million.
On Jan. 15, 2019, Entegra announced it had entered into a definitive 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 shares of SmartFinancial common stock. 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.

Subsequent to that announcement, First Citizens Bank approached Entegra and its advisors with a significantly 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 cash 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 Bank will 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.
As of December 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 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.

Customers should bank as they normally do at their existing branches, which will become part of First Citizens upon the completion of the merger.

Frank B. Holding Jr., chairman and chief executive officer of First Citizens, said: "First Citizens has a long and proud history in nearly all of these communities. We also share many core attributes with Entegra, including a commitment to service excellence and relationship banking. We look forward to building on the solid foundations both banks have established so that, together, we can better serve even more individuals and businesses."

Roger Plemens, president and chief executive officer of Entegra Bank, said: "We are pleased to announce this combination with First Citizens, which shares our customer focus and community banking approach. Not only does this represent a significantly higher price for our shareholders, we also believe that First Citizens' size and resources will present more opportunities in the future for our customers and communities."