Completion of Capital Raise Fulfills Key
Contingency for FNB Acquisition of Bank of
Granite
Regulatory and Shareholder Approvals
Represent Next Steps in the Merger
Process
FNB United Corp. (Nasdaq:FNBN), parent company of CommunityONE
Bank, N.A., today announced that investors have agreed to subscribe
for a total of $310 million in company common stock in a private
placement, contingent on obtaining shareholder and regulatory
approvals and satisfaction of other conditions. Issuance of the
common stock at $0.16 per share will complete the recapitalization
of FNB United, which is a key contingency in its plan to acquire
Bank of Granite Corporation (Nasdaq:GRAN), parent company of Bank
of Granite.
The proposed acquisition will unite two 100-year-old
institutions, creating a North Carolina community banking
organization with approximately $2.8 billion in assets, $2.4
billion in deposits and 63 full-service banking offices located in
some of the state's most robust markets. The transaction
remains subject to receipt of regulatory approvals and shareholder
approval of both banking companies.
"Completion of the capital raise is a significant event for
community banking in North Carolina," said Brian Simpson, who will
serve as CEO of the combined organization. "Two banking
companies that have served their communities faithfully for more
than 100 years will be revitalized so that the traditions of
service to business owners and consumers can continue. We believe
this is positive news for each of the communities served by
CommunityONE and Bank of Granite and for our entire state."
The Carlyle Group and Oak Hill Capital Partners are lead
investors in the capital raise, each having entered into definitive
agreements with FNB United to invest $79 million, each subject to
conditions contained in the investment agreements. FNB United has
now entered into additional definitive subscription agreements with
additional investors providing the investment of the remaining
capital of $152 million, subject to conditions contained in
the subscription agreements.
Jim Burr, Managing Director of The Carlyle Group, said: "This
strong and experienced leadership team is well positioned to
address current challenges and build for the future. The
revitalization of any bank franchise begins with seasoned
leadership, and Brian, Bob and their team have the depth and
breadth of experience needed for this opportunity."
FNB United will be headquartered in Asheboro, N.C. Subject to
the satisfaction or waiver of the remaining conditions, the
transaction is expected to close in October of 2011. The two bank
subsidiaries (CommunityONE and Bank of Granite) will be operated as
separate entities for a period of time; it is anticipated that the
merged bank will be named CommunityONE Bank, N.A. at a future date
to be determined.
"Brian and I have been gratified by the response we have
received from the investment community," said Bob Reid, who will
serve as President of the combined banking company. "A great deal
of work remains ahead, but with this commitment of capital and the
talented teams being put in place at CommunityONE and Bank of
Granite, we believe that the resulting institution will be
positioned to effectively serve its communities in the future."
Jim Campbell, Chairman of FNB United, said: "I would like to
commend all of our employees for their commitment to customer
service as we have navigated through these challenging times. This
focus on the customer has been invaluable in assuring that we are
well positioned for the revitalization that is planned with our new
capital and our new banking partners."
John Bray, Chairman of Bank of Granite, said: "The success of
the capital raise is great news for our customers, our employees
and the communities we serve. CommunityONE and Bank of Granite have
long traditions of personalized service that is a hallmark of
community banking. The addition of capital and the merger of our
organizations will ensure that this spirit lives on."
The Transaction
FNB United Corp. will be operated by new management after the
recapitalization and merger, led by Brian Simpson as Chief
Executive Officer and Bob Reid as President.
The merger agreement provides that Bank of Granite shareholders
will receive 3.375 shares of FNB United Corp.'s common stock in
exchange for each share of Bank of Granite common stock they own
immediately prior to completion of the merger.
Completion of the merger and the investments are dependent on
each other and the satisfactory completion of a number of other
conditions, including the exchange of FNB preferred stock held by
the U.S. Treasury for FNB common stock on the terms specified in
the merger and investment agreements, CommunityONE having
repurchased SunTrust's outstanding debt and preferred stock on the
terms specified in the agreements, receipt of regulatory approvals,
the approval of the shareholders of both FNB United Corp. and Bank
of Granite Corporation, and FNB and Bank of Granite meeting
specified financial condition requirements contained in the merger
and investment agreements.
Sandler O'Neill & Partners, L.P. and Raymond James &
Associates, Inc. are acting as placement agents in connection with
the private placement of the FNB United common stock.
About FNB United Corp.
FNB United Corp. is the Asheboro, N.C.-based bank holding
company for CommunityONE Bank, N.A. Opened in 1907,
CommunityONE Bank operates 45 offices in 38 communities throughout
central, southern and western North Carolina, and offers a complete
line of consumer, mortgage and business banking services, including
loan, deposit, cash management, wealth management and internet
banking services.
About Bank of Granite Corporation
Bank of Granite Corporation is the parent company of Bank of
Granite. Founded in 1906, Bank of Granite operates 18 full-service
banking offices in seven North Carolina counties – Burke, Caldwell,
Catawba, Iredell, Mecklenburg, Watauga and Wilkes.
Cautionary Statement
The issuance of the securities by FNB United pursuant to the
investment agreements and the subscription agreements have not been
and will not be registered under the Securities Act of 1933, as
amended, or any state securities laws, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and applicable state securities laws. This document shall not
constitute an offer to sell or the solicitation of an offer to buy
the securities, nor shall there be any sale of the securities in
any jurisdiction or state in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction or state.
Forward-Looking Statements
This document contains forward-looking statements concerning FNB
United's plans for raising capital, the conditions necessary for
closing on proposed capital investments, concerning plans and
objectives of management for future operations, concerning future
economic performance, or concerning any of the assumptions
underlying or relating to any of the
foregoing. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current
facts, and may include the words "believes", "plans", "intends",
"expects", "anticipates", "forecasts" or words of similar
meaning. While we believe that our forward-looking statements
and the assumptions underlying them are reasonably based, such
statements and assumptions are by their nature subject to risks and
uncertainties, and thus could later prove to be inaccurate or
incorrect. Accordingly, actual results could materially
differ from projections for a variety of reasons, to include, but
not limited to: the impact of local, national, and international
economies and events, including natural disasters, on FNB United's
business and operations and on tourism, the military, and other
major industries operating within the North Carolina market in
which FNB United does business; the impact of regulatory actions on
FNB United and its bank subsidiary, including the Consent Order
agreed to by CommunityONE Bank, N.A, with the Office of the
Comptroller of the Currency and the Written Agreement agreed to by
FNB United with the Federal Reserve Bank of Richmond; the impact of
legislation affecting the banking industry including the Emergency
Economic Stabilization Act of 2008 and the Dodd-Frank Act Wall
Street Reform and Consumer Protection Act; the impact of
competitive products, services, pricing, and other competitive
forces; movements in interest rates; loan delinquency rates and
changes in asset quality generally; the price of FNB United's
stock; volatility in the financial markets and uncertainties
concerning the availability of debt or equity financing; and the
impact of regulatory supervision. For further information on
factors that could cause actual results to materially differ from
projections, please see FNB United's publicly available Securities
and Exchange Commission filings, including FNB United's Forms 8-K
filed on April 27, 2011 and June 16 2011. FNB United does not
update any of its forward-looking statements.
Important Information for Investors and
Shareholders
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. The proposed transactions will be
submitted to the stockholders of FNB United and Bank of Granite
Corporation. FNB United and Bank of Granite Corporation will
file a registration statement on Form S-4, a joint proxy
statement/prospectus and other relevant documents concerning the
proposed transaction with the SEC. FNB United and Bank of
Granite Corporation will each provide the final joint proxy
statement/prospectus to its respective stockholders.
Investors and security holders are urged to read the registration
statement and the joint proxy statement/prospectus and any other
relevant documents filed with the SEC when they become available,
as well as any amendments or supplements to those documents,
because they will contain important information about FNB United,
Bank of Granite Corporation and the proposed transaction.
Investors and security holders will be able to obtain a free copy
of the registration statement and joint proxy statement/prospectus,
as well as other filings containing information about FNB United
and Bank of Granite Corporation free of charge at the SEC's web
site at http://www.sec.gov. In addition, the joint proxy
statement/prospectus, and other documents filed with the SEC by FNB
United may be obtained free of charge by directing such request
to: Investor Relations, FNB United, P O Box 1328, Asheboro,
N. C. 27204 or from FNB United's Investor Relations page on
its corporate web site at www.MyYesBank.com, and the joint proxy
statement/prospectus and the other documents filed with the SEC by
Bank of Granite Corporation may be obtained free of charge by
directing such request to www.bankofgranite.com.
FNB United, Bank of Granite Corporation and their respective
directors, executive officers, and certain other members of
management and employees may be deemed to be participants in the
solicitation of proxies in favor of the proposed transactions from
the shareholders of FNB United and from the shareholders of Bank of
Granite Corporation, respectively. Information about the
directors and executive officers of FNB United and Bank of Granite
Corporation, respectively, will be set forth in the joint proxy
statement/prospectus on Form S-4. Additional information regarding
participants in the proxy solicitation may be obtained by reading
the joint proxy statement/prospectus regarding the proposed
transaction when it becomes available.
CONTACT: Media Contacts:
Mark Brock
704-926-1305
mbrock@wrayward.com
John Mader
704-926-1316
jmader@wrayward.com
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