John Boyle

jboyle@citizen-times.com

Asheville Savings Bank, an institution founded in downtown in 1936, has been acquired by another North Carolina bank for $175 million.

In a joint statement issued Monday, First Bancorp, the parent company of First Bank, announced it will acquire the parent company of Asheville Savings Bank in a cash and stock transaction with a total value of $175 million, or $43.12 per share. First Bancorp has its headquarters in Southern Pines.

The sale, technically a merger agreement, has been unanimously approved by the boards of directors of each company, according to the press release. The deal will should close in the fourth quarter this year, but it is subject to regulatory approvals and approval by ASB Bancorp’s shareholders.

Asheville Savings Bank operates 13 locations in the Asheville, Marion and Brevard areas and had reported assets of $803 million, as of March 31.

"We are proud to become part of a longstanding, community banking focused organization," Suzanne DeFerie, president and CEO of Asheville Savings Bank. "The combination provides strong value and potential upside for our shareholders going forward. The combination also provides valuable additional products and services for our customers, an expanded branch network, and new opportunities for our employees as part of a larger organization."

DeFerie will join First Bancorp as a board member "and in a market leadership capacity," according to the release.

First Bank already has three branches in the Asheville market.

"We are very excited to be partnering with Asheville Savings Bank and increasing our footprint in the attractive Asheville market,” Richard Moore, First Bancorp CEO, said in the release. “Like First Bank, Asheville Savings Bank was also organized in the mid-1930s and has the same long history of service to its customers, its communities and its shareholders."

If the merger is completed, the combined company will have $5.2 billion in assets, $3.9 billion in loans and $4.3 billion in deposits.

In a Q&A for customers on its website, Asheville Savings Bank addressed the question of whether any of its banking centers will close.

"While First Bank has a few offices already in our market, they are excited to acquire the ASB brand and branch network and the breadth of our market coverage," the site states. "Current day-to-day operations will not be affected, so for now, you should continue to use the same Asheville Savings Bank offices that you are typically using for your banking needs."

As far as what will happen to Asheville Savings Bank employees, the company stated, "No definitive decisions have been made" yet.

"First Bank believes in having local leadership in place making decisions that meet the needs in each market," the Q&A states. "The goal is to retain as many employees as possible, and we anticipate the impact on our banking centers to be minimal."

Asheville Savings Banks also noted, "Employees whose jobs are impacted will be given consideration for opportunities to move to other available positions within the combined company and/or transition support roles. There also may be potential new career opportunities within the combined company for ASB employees."

In August 2015, a New York-based investor requested that the parent company of Asheville Savings Bank initiate the process of selling the bank "for a premium that maximizes shareholder value."

Firefly Value Partners sent a letter to ASB Bancorp Inc., board of directors in Asheville.

"The company's small size impedes its ability to generate adequate returns," Firefly investors wrote in 2015. "A larger institution (a 'potential acquirer') will utilize the company's assets to earn returns greater than those the company can earn on a stand-alone basis."

In the Q&A, Asheville Savings Bank maintains that it will still be a community bank "but will now be able to offer you an expanded portfolio of products and services and will be able to serve you at additional bank locations throughout out North Carolina and South Carolina."

George Self, an instructor of marketing at the North Carolina School of Banking, which is sponsored by the North Carolina Banking Association, said the merger seems to be a good deal between two solid institutions.

"The numbers look good," said Self, a Hickory resident who has worked closely with Asheville Savings Bank presidents dating back to the early 1970s. "There's no hint that anything is wrong with Asheville Savings Bank or that First Bank 'rescued' anybody. It looks like a negotiated merger."

If either bank were experiencing troubles, Self said, the Federal Deposit Insurance Corporation would be involved, and that's not the case here. Rather, this seems to be a case where smaller banks have a harder time competing in the modern banking world, and this merger will allow Asheville Savings to be more competitive.

"This looks like a straight-up kind of thing," Self said.