Community banks move ahead with merger plans
FNB United and Bank of Granite are in the process of merging following financial difficulties over the past three years.
Similar letters sent out to shareholders on Sept. 15 characterized the banks as each experiencing “declining stock price, deteriorating asset quality, increased levels of nonperforming loans and a weakening of its capital position.”
The shareholder letters noted that FNB United, which is based in Asheboro, and Bank of Granite, based in the town of Granite Falls in the Catawba River valley, serve communities that “have experienced serious economic troubles” in recent years.
Bank of Granite stockholders are expected to meet at the Crowne Plaza hotel in Hickory on Oct. 18 to vote on adoption of a merger agreement. Those who own stock with FNB United will meet the following day at Pinewood Country Club in Asheboro to do the same.
“Completion of the recapitalization and the merger is likely the only means for you to preserve any value in your FNB United common stock,” Chairman of the Board James M.
Campbell Jr. told FNB United shareholders in a recent letter. Private investors have put up $310 million to recapitalize FNB United.
“This is very unique in that what we really have here is a combination of 200-year old banking franchises, each of which have done very well over many years, but which have recently fallen on some trouble,” said Brian Simpson, a consultant who has been named
CEO of the proposed combined company following the merger and recapitalization. “‘Merger of equals’ is not a bad term, plus bringing on a new management team going forward. It’s really the new management team that has raised the capital.” .
Simpson said the two bank franchises’ subsidiaries will likely merge in the spring of 2012, and operate under the brand name of CommunityOne, which is currently used by FNB United. The headquarters and operation center of the new merged bank will be located in Asheboro. Simpson said the bank will try to give employees affected by job eliminations the opportunity to work in other capacities, but declined to comment on how many jobs might be lost in Granite Falls, which is located near Hickory, Morganton and Lenoir, and how many jobs might be added in Asheboro.