Pending shareholder and regulatory approval, North Carolina bank 1st Financial will exit the federal government’s Troubled Asset Relief Program. Should the deal gain all the necessary permissions, the bank will be bought out by First Citizens BancShares. The First Citizens CEO welcomed the change, claiming that the firm looks forward to expanding its reach in North Carolina, which is also its home state. According to reports, First Citizens has doggedly pursued the acquisition of a number of failed banks following the national financial crisis.
First Citizens’ parent organization will pay the U.S. Treasury $8 million in cash and pay an additional $2 million to shareholders. The buyout deal also means that First Citizens will effectively be establishing business entities in the form of a number of branches in western North Carolina.
Twelve Mountain 1st Bank branches are set to become First Citizens Banks following the merger. The firm now owns a pair of banks in Colorado, and it operates more than 400 individual branch locations in 17 different states. It is as yet unknown, however, whether all of the newly acquired locations will remain open under the new management.
Firms that want to acquire other companies do so with the caveat that any deals that they make must meet with regulatory approval. With the existence of federal business relief program stipulations and complicated bankruptcy laws, it’s critical that firms plan their deals out in advance if they want to profit from mergers and buyouts and avoid fines. Business attorneys may be able to help these organizations structure their deals from the early stages so that they can stay on the right side of the law.
Source: FOX Business, “First Citizens to Buy N.C. Bank 1st Financial“, Matthew Rocco, August 28, 2013