$310 Million Recapitalization
Consummated
Banks to Operate Separately
Until Spring 2012
FNB United Corp. (Nasdaq:FNBN), parent company of CommunityONE
Bank, N.A., today announced that it has completed the acquisition
of Bank of Granite Corporation (Nasdaq:GRAN), parent company of
Bank of Granite, and consummated a $310 million recapitalization.
The two banks will operate separately until late spring of 2012
when, subject to receipt of regulatory approval, it is anticipated
the consolidation process will be completed and will thereafter
operate solely as CommunityONE Bank.
Photos accompanying this release are available at
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http://www.globenewswire.com/newsroom/prs/?pkgid=10906
"This is truly an unprecedented historic event for community
banking in North Carolina," said Brian Simpson, the new CEO of FNB
United. "We have successfully raised sufficient capital to restore
two 100-year-old banking companies simultaneously. By combining
them under one organization we have the opportunity to again be an
economic driver in the communities we serve."
The combination of FNB United and Bank of Granite has resulted
in a North Carolina community banking organization with
approximately $2.8 billion in assets, $2.4 billion in deposits and
63 full-service banking offices located in some of the state's most
robust markets. Asheboro will serve as the corporate headquarters
and central operations center.
Simpson and Bob Reid, the new president of FNB United, led a
successful $310 million recapitalization of FNB United, which paved
the way for its acquisition of Bank of Granite and for the
recapitalization of both banks. Lead investors in the
recapitalization are The Carlyle Group and Oak Hill Capital
Partners, each having invested approximately $79 million.
"Our primary goals right now are exemplary customer service and
a smooth transition for our people," Reid said. "FNB United
and Bank of Granite employees have been re-energized, and we are
all focused on accomplishing our mission."
In addition to Simpson and Reid, FNB United and Bank of Granite
will now be led by a seasoned management team that includes David
Nielsen, (senior manager, KPMG; chief operating officer,
Wachovia/Wells Fargo), chief financial officer; David Lavoie
(senior risk manager, Bank of America), chief credit officer; Greg
Murphy (FDIC liquidator, senior risk manager, Bank of America),
chief workout officer; and Angus McBryde (treasury and balance
sheet manager, Wachovia), treasurer.
The new management team, which averages 26 years of banking
experience, is supported by a new board of directors that includes
Austin Adams (chief information officer, JP Morgan Chase, BankOne
and First Union), chair; Jerry Licari (national banking practice
leader, KPMG), chair, audit committee; Chan Martin (treasurer and
senior risk executive, Bank of America), chair, risk committee; and
Jerry Schmitt, (asset/liability committee chairman, First Union),
chair, compensation committee. The new board also includes a
representative from each lead investor, and two FNB United and one
Bank of Granite legacy board members.
"The closing of this transaction was achieved due to the
dedicated efforts and cooperation of everyone involved – our
investors, advisors and the leadership and shareholders of FNB
United and Bank of Granite," Simpson said. "We all share a
common mission of assuring that community banking remains strong in
North Carolina, serving individuals, families and businesses in
their own hometowns."
The Transaction
The merger agreement provided that Bank of Granite shareholders
received 3.375 shares of FNB United Corp.'s common stock in
exchange for each share of Bank of Granite Corporation common stock
they owned immediately prior to completion of the merger. FNB
United shareholders will continue to own their existing shares of
FNB United common stock after the merger and the
recapitalization. No earlier than January 1, 2012, FNB United
will distribute to each record holder of FNB United common stock as
of the close of business on October 20, 2011, non-transferable
warrants to purchase from FNB United one share of common stock for
each four shares of FNB United common stock held by such holder as
of the close of business on October 20, 2011 at a purchase price of
$0.16 per share.
Sandler O'Neill + Partners and Raymond James & Associates,
Inc. acted as financial advisors to FNB United, and Keefe, Bruyette
& Woods, Inc. acted as financial advisor to Bank of Granite
Corporation. Arnold & Porter LLP and Shell Bray Aycock
Abel & Livingston PLLC served as legal counsel for FNB United,
Parker Poe served as legal counsel for Bank of Granite Corporation
and Simpson Thacher & Bartlett served as legal counsel for The
Carlyle Group and Oak Hill Capital Partners.
About FNB United Corp.
FNB United Corp. is the Asheboro, N.C.-based bank holding
company for CommunityONE Bank, N.A. and Bank of
Granite. Opened in 1907, CommunityONE Bank operates 45 offices
in 38 communities throughout central, southern and western North
Carolina, and offers a complete line of consumer, mortgage and
business banking services, including loan, deposit, cash
management, wealth management and internet banking
services. Founded in 1906, Bank of Granite operates 18
full-service banking offices in seven North Carolina
counties—Burke, Caldwell, Catawba, Iredell, Mecklenburg, Watauga
and Wilkes.
Forward-Looking Statements
This news release may contain forward-looking statements
regarding future events. Forward-looking statements often
address our expected future business and financial performance, and
often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "seek," or "will." These statements are
only predictions and are subject to risks and uncertainties that
could cause the actual events or results to differ materially.
These risks and uncertainties include risks of managing our growth,
changes in financial markets, changes in real estate markets,
regulatory changes, changes in interest rates, changes in economic
conditions being less favorable than anticipated, and loss of
deposits and loan demand to other financial
institutions. Additional information concerning factors that
could cause actual results to be materially different from those in
the forward-looking statements is contained in FNB United's filings
with the Securities and Exchange Commission. FNB United does
not assume any obligation to update these forward-looking
statements or to update the reasons why actual results could differ
from those projected in the forward-looking statements.
CONTACT: Mark Brock (704) 926-1305
mbrock@wrayward.com
John Mader (704) 926-1316
jmader@wrayward.com
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