The transaction would be paid for with 70% Fifth Third common stock and 30% cash. First Charter operates 59 full-service financial centers, four insurance offices and 137 ATMs in North Carolina and Georgia. It also operates loan origination offices in Asheville, NC and Reston, VA.

According to an investor presentation on Fifth Third's website, First Charter has branches in the following North Carolina locations: 34 in the Charlotte-Gastonia-Concord area, five in Lincolnton, three in Statesville-Mooresville, three in Shelby, three in Forest City, one is Salisbury, five in Raleigh-Cary, one in Asheville, one in Brevard, two in Ashe, one in Alleghany, two in McDowell and one in Avery. It also has two branches in the Atlanta-Sandy Springs-Marietta, GA area.

A spokeswoman for Fifth Third tells GlobeSt.com that all the bank branches will remain open after the acquisition is completion. The First Charter branches will be converted into Fifth Third branches shortly after the transaction is completed, which is expected to occur in the first quarter of 2008.

"This furthers our penetration into fast-growing Southeastern metropolitan markets at a reasonable price," says Fifth Third Bancorp president and CEO Kevin Kabat, in a prepared statement. "The addition of First Charter provides us with an entry into the attractive North Carolina market and further diversifies our footprint into new, higher growth markets."

With the acquisition of First Charter, Fifth Third will add approximately $4.9 billion in assets and $3.2 billion in deposits. In the Charlotte market, Fifth Third will have $2.2 billion in deposits, giving it a fourth FDIC deposit market share. In Atlanta, it will have $366 million in deposits.

Fifth Third expects the merger to generate $35 million pre-tax annual expense reductions ($22 million after tax) phase in over two years. Fifth Third expects to incur merger-related one-time charges of up to $61 million pre-tax ($39 million after tax) related to staff training, retention and severance; real estate; systems integration; and other miscellaneous accruals.

First Charter was advised in the transaction by the law firm of Helms Mulliss & Wicker, PLLC and the investment bank Keefe, Bruyette & Woods. Fifth Third was advised by Hugh L. McColl, Jr., of McColl Partners and Goldman Sachs & Co.

Instant Insights /

Fifth Third Bancorp Enters NC With $1B Acquisition

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