FNB United Corp. is another step closer to completing its proposed acquisition of Bank of Granite Corp. after receiving approval for the deal from the Federal Reserve of Richmond.
The $1.7 billion-asset FNB in Asheboro, N.C., said Friday that the proposed management team for FNB also received clearance from the Federal Reserve. Most of the new management would comes from larger banks, including BB&T Corp. and the former Wachovia Corp.
Additionally FNB's primary bank subsidiary, CommunityOne Bank, received approval from the Office of the Comptroller of the Currency for its capital restoration plan and settlement of certain debt and preferred stock securities held by SunTrust Banks Inc.
FNB's plan to acquire the $807 million-asset Bank of Granite in Granite Falls, N.C., was proposed in April. The deal would combine two struggling institutions that have been hit hard by defaults on real estate loans. At June 30, FNB had a negative 6.15% tier 1 risk-based capital ratio while Bank of Granite reported a tier 1 risk-based capital ratio of 3.82%.
The deal stipulates that FNB convert its Trouble Asset Relief Program funds and pay back junior subordinated debt held by SunTrust. FNB will cash out at a 35% discount to the principal and 100% of the unpaid and accrued interest at the time the deal closes.
In August, FNB said it had raised $310 million in capital for the merger, which included investments of $79 million each from The Carlyle Group and Oak Hill Partners.
The proposed acquisition will create a North Carolina community banking organization with approximately $2.8 billion in assets, $2.4 billion in deposits and 63 full-service banking offices. The merged organization will be led by Brian Simpson as chief executive and Bob Reid as president with headquarters in Asheboro.
The merger and recapitalization still need approval from FNB shareholders and Bank of Granite stockholders. Both banks have meetings scheduled for next week.
