Home Savings Bank of Siler City (N.C.) on Wednesday called off its merger with FNB Corp., Asheboro, N.C., three days before the deal was scheduled to close.
Edwin E. Bridges, president of $57 million-asset Home Savings, said the deal has been called off because FNB's stock has climbed too high since the deal was announced last June.
"We were concerned that, at the agreed-upon exchange ratio, our shareholders would not receive enough of FNB's stock," Mr. Bridges said.
According to the agreement, the board of Home Savings had the right to call off the deal if FNB's stock rose to more than $36.50 per share. On Wednesday, FNB's stock closed at $48.50, up $3.
Michael C. Miller, president of $325 million-asset FNB, said he was disappointed that the deal fell through.
"While I don't agree with the action of the Home Savings board, I fully understand that they are within their rights to terminate the transaction," he said. FNB is also the lead plaintiff in the banking industry's case against credit unions, currently pending before the Supreme Court.
The shareholders of Home Savings approved the deal on Dec. 19, and it was expected to close Saturday.