Another M&A domino has fallen in North Carolina.
The $3.4 billion-asset First Bancorp in Southern Pines, N.C., has agreed to buy the $706 million-asset Carolina Bank Holdings in Greensboro, N.C., for $97.3 million, or $19.26 a share, in cash and stock. The deal, which is expected to close by the first quarter of 2017, values Carolina Bank at 155% of its tangible book value.
Carolina Bank has eight branches, $491 million in loans and $601 million in deposits.
"Carolina Bank is an outstanding addition … as we continue our expansion into higher growth markets," Richard Moore, First Bancorp's chief executive and a former chairman of the North Carolina State Banking Commission, said in a press release Wednesday. "We are excited to welcome Carolina Bank's customers, employees, and communities … and look forward to continuing to develop upon the strong foundation Carolina Bank has built."
First Bancorp said in a regulatory filing that it expects to earn back the deal's 8% dilution to tangible book value in less than five years.
The acquisition is expected to be accretive to First Bancorp's earnings by double digits. The company said it plans to cut Carolina Bank's noninterest expenses by 40%; there are three overlapping branches and redundant mortgage operations.
First Bancorp said it expects to incur about $9.2 million in after-tax merger-related charges.
The company also said it has opportunities to offer wealth management, insurance, credit cards and treasury services to Carolina Bank's customers.
"The combination provides strong value for our shareholders, including the opportunity to benefit as First Bancorp shareholders going forward," Robert Braswell, Carolina Bank's president and chief executive, said in the release. "The combination also provides valuable additional products and services for our customers, an expanded branch network, and new opportunities for our employees."
Several community banks in North Carolina have agreed to be sold in recent months, including Premier Commercial Bank and NewBridge Bancorp in Greensboro and CommunityOne Bancorp in Charlotte. Yadkin Financial in Raleigh, which bought NewBridge, is also rumored to have hired an investment bank to explore its strategic options.
First Bancorp agreed in March to exchange branches with First Community Bancshares in Bluefield, Va., to bolster its operations in North Carolina.
Keefe, Bruyette & Woods and Nelson Mullins Riley & Scarborough advised First Bancorp. Sandler O'Neill and Wyrick Robbins Yates & Ponton advised Carolina Bank.