FirstCitizens To Buy Entegra For $220M After Outgunning SmartFinancial

First Citizens BancShares Inc. FCNCA and Entegra Financial Corp ENFC announced the signing of a definitive merger agreement Wednesday. 

What Happened

Raleigh, North Carolina-based First Citizens will buy Franklin, North Carolina-based Entegra for $30.18 per share for a total of $219.8 million per the agreement, the banks said in a joint press release.

The deal follows a previous attempted merger of equals between Entegra and SmartFinancial Inc SMBK in January that would have converted each Entegra common share into 1.215 SmartFinancial shares for a transaction value of $22.36 per share. 

First Citizens said it then approached Entegra and its advisors with a higher offer, leading Entegra to conclude that First Citizens' proposal was a superior one, according to the Wednesday press release. 

First Citizens said it will pay a $6.4-million termination fee to SmartFinancial on Entegra's behalf. 

Why It's Important

Entegra branches will become part of First Citizens once the merger is complete. 

“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," Frank Holding Jr., First Citizens' president and CEO, said in a statement.

"We look forward to building on the solid foundations both banks have established so that, together, we can better serve even more individuals and business.”

First Citizens shares Entegra's customer focus and approach to community banking, Entegra President and CEO Roger Plemens said in a statement. 

"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.”

What's Next

First Citizens and Entegra said they expect the merger to close in the second half of 2019 subject to approval from regulators and Entegra shareholders, as well as satisfaction of customary closing conditions. 

FirstCitizens shares were up 0.88 percent near the end of Wednesday's trading session; Entegra shares were rallying by 24.69 percent; and SmartFinancial shares were up 5.7 percent. 

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Photo by Dustin Blitchok.