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State and federal banking regulators encouraged the merger deal between Crescent State Bank and VantageSouth for safety and soundness and other reasons, a proxy filing says.
November 13
Crescent Financial Bancshares (CRFN) in Cary, N.C., has refiled a preliminary proxy for its pending takeover of a smaller bank that omits details about how regulators encouraged the deal.
The Federal Reserve Bank of Richmond, the Federal Deposit Insurance Corp. and the North Carolina Office of the Commissioner of Banks repeatedly "encouraged" and "advised" Piedmont Community Bank Holdings to merge Crescent and VantageSouth Bank in Burlington, N.C., according to a
That encouragement was cited as one of the reasons for the merger in the Nov. 2 proxy.
There was "no regulatory pressure" on Crescent to acquire VantageSouth, says Scott Custer, the chief executive of Piedmont. He is also CEO of Crescent and the chairman of VantageSouth.
Any changes between the two documents reflect the typical polishing of a preliminary filing ahead of the final draft, Custer says.
The deal makes "good business sense" because Crescent and VantageSouth are complementary organizations with the same owner, Custer says.
Raymond Grace, the acting banking commissioner in North Carolina, also denied that regulators exerted undue influence.
"There are clearly cases where some banks are in dire need of recapitalization or other strengthening, and absent such, need another exit strategy," Grace wrote in an e-mail. "Regulators will certainly discuss this with such banks. However, no regulators I know, state or federal, would pressure a bank to acquire another. That certainly was not the case here."
Spokesmen for the Richmond Fed and the Federal Deposit Insurance Corp. declined to comment Thursday.
The deal is scheduled to close by yearend.
