FNB United Corp. in Asheboro, N.C., has finished raising the $310 million of capital it needs to move forward with its plan to acquire another North Carolina bank.
The $1.9 billion-asset FNB United announced in April that it was buying Bank of Granite in Granite Falls, but the ailing company said then it would need to raise fresh capital to complete the deal. Two private-equity groups, the Carlyle Group and Oak Hill Capital Partners, agreed in April to invest roughly $79 million each and FNB United said Tuesday that other investors would provide the remaining $152 million.
FNB United, the parent of CommunityOne Bank, said that it would sell its shares to investors at 16 cents each. The stock sale still needs to be approved by shareholders and regulators.
CommunityOne and Bank of Granite are both low on capital after suffering steep losses on real estate loans. At March 31, nearly 25% of CommunityOne's loans and roughly 10.5% of Bank of Granite's were at least 90 days past due, according to Federal Deposit Insurance Corp. data.
Brian Simpson, who will serve as the chief executive officer of the merged banking companies, said in a statement that the capital raise is a "significant event for community banking in North Carolina.
"Two banking companies that have served their communities faithfully for more than 100 years will be revitalized so that traditions of service to business owners and consumers can continue."
The merger is expected to close in October. The combined company would have $2.8 billion of assets and 63 branches in North Carolina.
