Oct 1 - New Century Bancorp Inc. (Nasdaq: NCBC), the holding company for New Century Bank, and Select Bancorp Inc., the holding company for Select Bank & Trust Company, have announced the signing of a strategic merger agreement.
The agreement was approved by the boards of directors of both companies and provides for a partnership between Dunn, N.C.-based New Century Bank and Greenville, N.C.-based Select Bank & Trust Company, announced William L. Hedgepeth II, president and CEO of both New Century Bancorp and New Century Bank, and Mark A. Holmes, president and CEO of Select Bancorp and CEO of Select Bank & Trust Company.
The transaction is expected to close mid-2014 subject to the approval of federal and state regulatory agencies and shareholders of both companies.
New Century Bank, which first opened for business in 2000, operates seven branches in the eastern North Carolina communities of Dunn, Fayetteville (two), Goldsboro, Clinton, Lillington, and Lumberton and two loan production offices located in Raleigh and Greenville. New Century Bank plans to open a full-service branch in Raleigh in October 2013, which will replace the current LPO. Total assets, deposits, and loans for New Century Bancorp as of June 30, 2013, were $550 million, $465.5 million, and $355.7 million, respectively.
Select Bank & Trust Company, which opened for business in 2004, maintains six offices in Greenville (two), Elizabeth City, Washington, Gibsonville and Burlington. Select Bancorp Inc. reported total assets, deposits and loans of $265.3 million, $213.7 million and $209.7 million, respectively, as of June 30, 2013.
The projected total assets of the combined company are $815.3 million, projected total deposits $679.2 million and projected total loans $565.4 million.
"This partnership creates a strong community bank committed to serving personal and business customers in our markets, as well as the communities in which we operate," said Hedgepeth. "Together, we believe we will be able to expand into new markets, offering new customers the same high value and personal service both banks have given their customers."
According to Holmes, "We are combining two banks that have almost no market overlap, but are located in a number of adjacent markets, into one strong financial institution that should allow us to serve more customers and communities in meaningful ways."
Under the terms of the agreement, shareholders of Select common stock will receive 1.8264 shares of New Century common stock for each share of Select common stock, for an implied value of approximately $31.1 million in the aggregate, based on 2,475,000 shares of Select common stock outstanding and the $6.87 per share closing price of New Century common stock on Sept. 27, 2013, valuing each share of Select common stock at approximately $12.55 per share.
In addition, each share of Select's issued and outstanding preferred stock will be exchanged for one share of newly issued New Century preferred stock having terms substantially identical to the Select preferred stock. All of the issued and outstanding shares of Select's preferred stock are held by the Secretary of the United States Treasury and were issued in connection with Select's participation in the Small Business Lending Fund.
New Century Bancorp Inc was advised by Janney Montgomery Scott LLC and Wyrick Robbins Yates & Ponton LLP served as New Century's legal counsel. Select Bancorp Inc. was advised by Smith Capital Inc. and Williams Mullen served as Select's legal counsel.