Charlotte-based CommunityOne Bancorp on Monday announced a deal to be acquired by a 6-year-old Florida bank holding company created by former Bank of America executives.
Capital Bank Financial Corp. will purchase CommunityOne, headquartered on East Morehead Street, in a roughly $350 million purchase set to close in the first quarter of next year. Regulatory approvals are still required.
Former Bank of America executives Gene Taylor and Chris Marshall launched Capital Bank Financial Corp. – formerly North American Financial Holdings Inc. – in 2009 to buy up failed and troubled banks. Taylor is Capital’s CEO and chairman. Marshall is chief financial officer. Both live and work in Charlotte.
Capital Bank Financial Corp.’s banking operation, Capital Bank, is based in Raleigh.
It was not immediately clear on Monday what impact the deal will have on headquarters locations. Company officials said no decisions have been made.
CommunityOne’s branches are expected to be rebranded under the Capital Bank name.
In Charlotte and elsewhere, community banks have dwindled in number as a result of years of industry consolidation. In 2007, before the recession, the city was headquarters for seven community banks. It is now home to four.
Community banks have assets of $10 billion or less in total, according to one definition used by regulators.
As is typical in mergers, company officials will look for ways to remove costs from duplicated processes. Marshall said plans call for reducing expenses in CommunityOne’s operations by 39 percent by 2017.
Virtually all of CommunityOne’s customer-facing employees will be retained, he said.
Large closures of branches are not expected, Marshall said, noting that only four branches of the combined banks are within close proximity to one another.
Monday’s deal is expected to increase Capital Bank’s presence in the Charlotte metropolitan area, where it has four branches across Catawba and Iredell counties. CommunityOne has 14 branches in the metro area, according to the latest federal data.
The purchase is also expected to expand Capital Bank’s presence elsewhere in North Carolina, where federal data show it has 51 branches.
The deal brings together executives with roots in Charlotte banks.
CommunityOne president and CEO is Bob Reid, a former executive for Charlotte’s First Union Corp., which merged in 2001 with Wells Fargo predecessor Wachovia Corp. Reid will be appointed to Capital Bank’s board.
Monday’s purchase comes after years of work by CommunityOne – which went by the name FNB United Corp. until 2013 – to improve its health following the financial crisis.
Reid and CommunityOne CEO Brian Simpson, who stepped down last year, helped raise money to rescue CommunityOne and another struggling community lender, Bank of Granite, which together now operate as CommunityOne.
Last year, CommunityOne posted an annual profit for the first time since 2007.
In a conference call with analysts on Monday, Marshall praised CommunityOne’s turnaround efforts.
“They’ve done a very good job cleaning up legacy credit issues,” he said.
The merger will create a bank with nearly $10 billion in assets, a threshold that brings additional regulations. One of those, part of the 2010 Dodd-Frank financial overhaul law, places a cap on processing fees that stores pay to banks each time a customer swipes their debit card.
Surpassing $10 billion in assets also subjects banks to “stress tests,” exams required under Dodd-Frank to make sure banks have enough capital to weather another economic downturn.
Marshall said he doesn’t expect the merged bank to pass $10 billion in assets until 2017.
Capital Bank has $7.3 billion in assets and operations across the Carolinas, Tennessee and Virginia. CommunityOne, with $2.4 billion in assets, operates in the Carolinas only.