Yadkin Financial Corporation, VantageSouth Bancshares Merge To Create Largest Community Bank in NC

Published Wednesday, January 29, 2014 at 4:56 pm
VantageSouth CEO Scott Custer, left, and Yadkin Financial CEO Joe Towell shake hands. Photo by Donn Young/Yadkin Financial

VantageSouth CEO Scott Custer, left, and Yadkin Financial CEO Joe Towell shake hands. Photo by Donn Young/Yadkin Financial

Jan. 29, 2014. VantageSouth Bancshares, Inc. and Yadkin Financial Corporation jointly announced today that they have entered into a definitive merger agreement.

The combination will create the largest community bank headquartered in North Carolina with approximately $4.0 billion in assets and significant distribution and scale across the state.

In the merger, VantageSouth Bancshares, Inc. shareholders will receive 0.3125 shares of Yadkin Financial Corporation common stock for each share of VantageSouth Bancshares, Inc. common stock. At the effective date, the transaction would be valued at approximately $299 million, based on the closing price of Yadkin Financial Corporation common stock on January 24, 2014.

“It is with great enthusiasm that we announce the merger of these two strong community banks,” said Joe Towell, President and Chief Executive Officer of Yadkin Financial Corporation. “This transaction creates significant value for the shareholders of both companies, provides greater convenience and services for our customers, and transforms the banking landscape in the Carolinas. We will have meaningful presence in major markets across the state including Charlotte, Raleigh-Durham, Greenville, and Wilmington while continuing our focus on our community markets.”

“This merger-of-equals creates a strong community banking franchise with greater competitive advantage, profitability, and future growth potential,” said Scott Custer, VantageSouth Bancshares, Inc.’s President and Chief Executive Officer. “The breadth of the joined franchise, combined with the talent of the two teams will create exceptional service for our customers. Our companies have spent considerable time evaluating the philosophies of our two banks and the merits of this transaction and we believe we are creating a franchise with substantial upside.”

The merger is expected to generate approximately $10 million in fully phased-in annual cost savings or approximately 8% of the expected combined expense total. This estimate is after realization of standalone cost save initiatives commenced before the merger announcement. Additionally, the merger is expected to be over 15% accretive to the standalone 2015 earnings per share of both entities, excluding the impact of the potential revenue enhancement opportunities. In the merger, Yadkin Financial Corporation will be the legal acquirer and VantageSouth Bancshares, Inc. will be the accounting acquirer.

Leadership

The combined company will be governed by a 14 person Board of Directors consisting of an equal number of VantageSouth and Yadkin directors. Yadkin’s Joe Towell will become Executive Chairman of the new company, serving as Chairman of the Board of Directors as well as a senior executive in the company. VantageSouth’s Scott Custer will become President and Chief Executive Officer of the combined company and continue his service as a director. The other members of the executive management team include Terry Earley, Mark DeMarcus, Steve Jones, and Ed Shuford.

Capital Raise

In conjunction with the announced merger, VantageSouth Bancshares, Inc. announced today the execution of securities purchase agreements for a $46.9 million private placement of its common stock to new and existing investors, including certain members of VantageSouth Bancshares, Inc. Board of Directors and their affiliates. The capital raise is expected to close on or about January 31, 2014, subject to certain customary closing conditions. The net proceeds of the private placement will be used to redeem the Company’s outstanding $42.8 million of preferred stock previously issued to the U.S. Department of Treasury (“Treasury”) pursuant to the TARP Capital Purchase Program (the “TARP Securities”), to repurchase the warrants to purchase 1,348,398 shares of common stock from Treasury and for general corporate purposes Upon closing of the merger and the capital raise, Yadkin Financial Corporation shareholders will own approximately 45.4% of stock in the combined company; VantageSouth Bancshares, Inc. existing shareholders will own approximately 45.5% and the investors in the capital raise will own approximately 9.1%.

Company Name and Headquarters

Upon closing, the name of the holding company will be Yadkin Financial Corporation. The company will be headquartered in Raleigh, North Carolina, with banking operations located in Statesville, North Carolina.

Approvals

The transaction has been unanimously approved by the Board of Directors of each company and is expected to close late Q2 2014, subject to shareholder and regulatory approval and other customary closing conditions.


Here is a story about High Country Bank, which began in Boone in the late ’90s and was bought out by Yadkin Bank about 10 years ago. 

 

 

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