Bank of Commerce sold to HomeTrust Bancshares in $10 million deal

03/04/2014 10:10 AM

03/04/2014 10:12 AM

Charlotte-based Bank of Commerce said Tuesday that it has agreed to be acquired by HomeTrust Bancshares Inc. of Asheville in a deal valued at about $10 million.

Bank of Commerce will be joining the fold of a rapidly expanding bank. In January, HomeTrust announced it would acquire Jefferson Bancshares Inc. in East Tennessee. Once the two deals are done, HomeTrust will have $2.2 billion in assets.

The deal will give HomeTrust a coveted foothold in the Charlotte market. The bank currently has locations as close as Cherryville, Shelby and Lexington, but none in Mecklenburg County.

“We’ve been looking for an opportunity to enter that market,” CEO Dana Stonestreet said in an interview with the Observer. “We see it as an opportunity for sustainable growth for our community banking model for decades to come, really.”

Bank of Commerce focused on commercial clients. HomeTrust will bring a more expansive product line, including mortgages.

The acquisition marks the latest move in a steadily consolidating community banking industry. The number of banks in North Carolina has been shrinking rapidly as bankers say regulatory pressure and low interest rates make small banks difficult to operate.

It also marks the end of a seven-year run for Bank of Commerce, which has $129 million in assets. The commercial bank was founded in 2006 by long-time Charlotte community banker Wes Sturges.

His first startup bank, First Commercial Bank, sold after seven years to Bank of Granite in 2003.

Sturges said he had engaged an investment banker about a year ago to explore a possible sale, but that the call from HomeTrust a few months ago was “out of the blue.”

“We got a good offer,” Sturges said. “As we look at the higher regulatory costs of running a smaller bank, it just makes sense to marry into a bank that shares our core philosophy.”

HomeTrust said it would pay $6.25 per share in cash, a nearly 50 percent premium over Monday’s closing price of $4.20. Bank of Commerce shares rose 45 percent Tuesday, closing at $6.09.

Sturges will stay with HomeTrust as its Charlotte-area president through at least the end of the year, he said. He will be 65 by then, though, and he says he will probably retire.

The bulk of the Bank of Commerce team will remain with HomeTrust, Sturges said. Some back office positions, however, will probably be eliminated.

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