First Citizens plays disruptor role with agreement to buy N.C. bank

First Citizens BancShares in Raleigh, N.C., has snagged a bank that had a deal with someone else.

The $35 billion-asset company has reached an agreement to buy Entegra Financial in Franklin, N.C. The $1.6 billion-asset Entegra had agreed in January to sell itself to SmartFinancial in Knoxville, Tenn., in a merger of similar sized institutions.

First Citizens said in a press release Wednesday that it will pay $219.8 million in cash for Entegra. It will also pay a $6.4 million termination fee to SmartFinancial. The deal is expected to close in the second half of this year.

First Citizens already owned about 1.6% of Entegra’s common stock.

First Citizens’ offer priced Entegra at $30.18 a share, or 35% more than the value of the all-stock deal with SmartFinancial. SmartFinancial and Entegra had a clause in their merger agreement that allowed Entegra to have discussions with First Citizens.

First Citizens shares “many core attributes with Entegra, including a commitment to service excellence and relationship banking,” Frank Holding Jr., First Citizens’ chairman and CEO, said in the release.

“We look forward to building on the solid foundations both banks have established so that, together, we can better serve even more individuals and businesses," Holding added.

“Not only does this [deal] represent a significantly higher price for our shareholders, we also believe that First Citizens’ size and resources will present more opportunities in the future for our customers and communities,” Roger Plemens, Entegra’s president and CEO, said.

Sandler O’Neill and Hunton Andrews Kurth advised Entegra. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan advised First Citizens.