Entegra settles with adviser over unexpected merger expense
Entegra Financial in Franklin, N.C., has reached a settlement with an adviser over unexpected charges tied to a past acquisition.
The $1.7 billion-asset company disclosed in a regulatory filing Thursday that an unnamed adviser agreed to pay it about $1.8 million by April 30. The payment addresses all claims against the adviser.
Entegra disclosed during a Jan. 16 conference call tied to its sale to SmartFinancial that it incurred a tax penalty from its 2017 purchase of Chattahoochee Bank of Georgia because of the structure of that acquisition.
“We have pursued recovery of that tax penalty from a couple of our former advisers,” David Bright, Entegra’s chief financial officer, said during the conference call. He noted that the deal with SmartFinancial was set up so Entegra could distribute any recoveries to its own shareholders.
Entegra warned a day after announcing its sale to SmartFinancial that it had to address a possible goodwill impairment charge that had the potential of reducing shareholder equity and 2018 income.
SmartFinancial expects to complete its purchase of Entegra this quarter.