News Column

VantageSouth, Yadkin merger to create largest community bank in NC

January 27, 2014

By David Ranii, The News & Observer (Raleigh, N.C.)

Jan. 27 --The corporate parents of Raleigh -based VantageSouth Bank and Yadkin Bank of Statesville have agreed to a merger that will forge the largest community bank headquartered in North Carolina with 78 branches and about $4 billion in assets. The deal announced Monday morning by the two publicly traded banks is being billed as a merger of equals that will be headquartered in Raleigh and will base its banking operations in Statesville . Scott Custer , president and CEO of VantageSouth, will assume that role at the combined bank while his counterpart at Yadkin Bank , Joe Towell , will be executive chairman of the new company. Towell also will be a "senior executive" at the new company. The combined company will be called Yadkin Financial Corp. and will be governed by a 14-person board split evenly between VantageSouth and Yadkin directors. "This merger-of-equals creates a strong community banking franchise with greater competitive advantage, profitability and future growth potential," Custer said in a prepared statement. Towell noted that the combined bank will have a "meaningful presence" in major markets across the state. Today VantageSouth has 45 branches in central and eastern North Carolina . Yadkin has 33 branches in central and western North Carolina , including two in Durham and one in Hillsborough , and in South Carolina . Shares of bank banks rose Monday morning in the wake of the announcement. The deal, which is subject to regulatory approval and is expected to close before the second quarter, calls for shareholders of VantageSouth Bancshares to receive 0.3125 shares of Yadkin Financial stock for each share that they own. That values the transaction at $299 million , based on Friday's closing price of Yadkin Financial shares. VantageSouth also announced that it expects to close on the private sale of $46.9 million in common stock to new and existing investors within the next few days, money it has earmarked to pay back $42.8 million owed to the federal government -- money it received during the financial crisis under the federal Troubled Asset Relief Program. When the deal is completed, Yadkin Financial shareholders will own about 45.4 percent of stock in the combined company and VantageSouth shareholders will own 45.5 percent. The remaining 9.1 percent will be owned by investors in the pending VantageSouth stock sale. The two companies expect to generate about $10 million in annual cost savings thanks to the merger. VantageSouth shares were trading at $5.73 , up 59 cents , mid-morning Monday. Shares of Yadkin were trading at $18.59 , up $1.28 . Ranii: 919-829-4877 ___ (c)2014 The News & Observer (Raleigh, N.C.) Visit The News & Observer (Raleigh, N.C.) at Distributed by MCT Information Services

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Source: News & Observer (Raleigh, NC)

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