First Citizens Bank & Trust Co. and Entegra Financial Corp. announced a definitive merger agreement providing for the acquisition of Franklin, N.C.-based Entegra Financial Corp. by First Citizens Bank, which is headquartered in Raleigh, N.C. Entegra provides deposit and loan services through its subsidiary, Entegra Bank.
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 the satisfaction of other customary closing conditions. Under the terms of the agreement, cash cosideration 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; and no consideration will be paid to First Citizens or its affiliates as a result of their ownership of shares of Entegra’s common stock. As of today, First Citizens Band and/or its affiliates own approximately 1.56 percent of Entegra’s outstanding common stock. The total transaction value, including termination fee, is anticipated to be approximately $219.8 million.
On Jan. 15, 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 share 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 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 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 for Dec. 31, 2018, 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.
Frank B. Holding Jr., chairman and CEO 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 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 CEO of Entegra Bank, commented, “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 belive that First Citizens’ size and resources will present more opportunities in the future for our customers and communities.”