An Ohio-based bank has agreed to buy Charlotte-based NewDominion Bank, a move that will leave the city with just one bank headquartered here after a spate of mergers.
Under the agreement announced Tuesday, Park National Corp., based in Newark, Ohio, will pay $76.4 million in cash and stock to buy the remaining 91.45 percent of NewDominion shares and options that the company doesn’t already own. Park National bought an 8.55 percent stake in the bank in 2016.
NewDominion, which has $338 million in assets, opened in 2005 after its leaders raised $40 million in capital, then a state record for a start-up bank. It struggled during the recession but raised additional capital in recent years and had stayed independent while other local banks pursued mergers.
The bank said it will keep its name and local leadership after the sale to Park National.
“Local decision-making will continue to stay here,” NewDominion CEO Blaine Jackson, who joined the bank in 2011 as chief financial officer, said in an interview.
Being part of a bigger bank will allow NewDominion to offer new wealth management services and make bigger loans, Jackson said. For example, NewDominion has an internal loan limit of about $4 million, while Park National, with about $7.5 billion in assets, has an internal limit of about $30 million.
“We don’t have any intention to go out tomorrow and do a $30 million loan,” Jackson said. “But to the extent that we want to do a $5-, $6- or $7-million loan, it will help us better serve the community.”
For NewDominion shareholders, the deal means they receive .01023 shares of Park National stock or $1.08 in cash for each share they own.
That’s a hit for original shareholders who initially paid $10 per share. But Jackson noted that in more recent capital raises shareholders bought their stock for either 50 cents or 54 cents per share. Original shareholders were also given an opportunity to buy more stock at those lower prices, he added.
The deal, which needs approval from regulators and NewDominion shareholders, is expected to close in the third quarter, Jackson said.
In the past year, three Charlotte-based banks – Capital Bank Financial, Park Sterling and Carolina Premier – have been acquired by other banks. That leaves Bank of America, the nation’s No. 2 U.S. bank with about $2.3 trillion in assets, as the only bank still headquartered in the city. Wells Fargo is based in San Francisco but has its biggest employee base in Charlotte after buying Wachovia in 2008.
These recent deals are a sign that outside banks, such as Park National, want to take advantage of Charlotte’s strong market, Jackson said.
“They (Park National) love the metro strategy,” he said, “and the growth opportunities that Charlotte can afford.”