Another out-of-town bank merger is shaking things up on the ground in Richmond.
The parent of Memphis-based First Tennessee Bank announced Friday its plans to acquire Charlotte-based Capital Bank in a transaction that will create a $40 billion Southeast banking behemoth and bring a new bank brand to the local market.
The deal, expected to close in the fourth quarter, combines First Tennessee’s $30 billion in assets and Capital Bank’s $10 billion. The resulting company will have 363 branches across Tennessee, the Carolinas, Florida and Virginia, including First Tennessee’s Richmond outpost on West Broad Street at Reynolds Crossing.
The flag on that location, along with all First Tennessee branches outside its home state, will be replaced with the Capital Bank moniker, which previously hasn’t had a Richmond presence.
Gail Letts, Virginia market president for First Tennessee, said despite the name change, it will be largely business as usual for her crew in Richmond.
“As far as operationally, probably very little will change since we are the acquirer,” Letts said.
First Tennessee arrived in Richmond in 2008, keeping a fairly low profile until its push for greater visibility in 2015.
Letts, who joined First Tennessee in 2015 after a long career at SunTrust and a brief stint at C&F Bank, said she was the bank’s fourth Richmond employee when she joined two years ago. It finished 2016 with 11 and now has 15 local workers, she said. The bank had $14 million in local deposits as of June 30 last year, according to the most recent FDIC figures.
Letts said her group’s efforts on the ground here will get a boost from the $2.2 billion deal in the form of a larger lending limit.
As for the name change to Capital Bank, Letts said it could help business.
“Everywhere I go people ask, ‘How does the First Tennessee name play in the (Richmond) market?’” she said. “It has helped because it has a proud history, but having the name of another state than you’re in raises a few eyebrows.”
Barclays Capital and Morgan Stanley advised First Tennessee in the deal, while Sullivan & Cromwell was its legal counsel. Capital Bank was advised by Sandler O’Neill and UBS Investment Bank, along with legal counsel Wachtell, Lipton, Rosen & Katz.
The First Tennessee/Capital Bank deal is the latest out-of-town banking merger that will have a ripple effect locally.
Last month, Charlotte-based Park Sterling bank agreed to be acquired by South Carolina giant South State Bank. That transaction, valued at $691 million, will plant the South State Bank brand in Richmond for the first time, as it will be hung on Park Sterling’s seven local branches.
Also last month, Hampton Roads-based TowneBank, which has nine branches in Richmond, announced a deal to acquire Paragon Commercial Bank of North Carolina and its parent company in a transaction valued at $324 million.
That deal would give TowneBank total assets of $9.7 billion, which would help it overcome Richmond-based Union Bank & Trust as the largest community bank headquartered in the state.