Bank board gives merger unanimous nod
The board of directors of Smithfield State Bank on Friday unanimously approved a merger with Centra Financial Holdings Inc. of Morgantown, W.Va. The action comes several weeks after it was learned Centra Financial had offered Smithfield State Bank shareholders $40 in cash for each share of their stock.
The transaction is valued at about $29 million.
Smithfield State Bank, Fayette County’s last locally owned bank, will become a subsidiary of Centra Financial, pending shareholder and government regulatory approval. The deal is expected to culminate in the second quarter of the year, officials of both banks said.
Centra Financial is the holding company for Centra Bank, which has eight offices in Morgantown and Martinsburg, W.Va. Centra has more than $578 million in assets.
Smithfield State Bank, which has four offices in Smithfield, Point Marion, Masontown and Uniontown, has assets of about $236 million. The bank employs about 74 people.
It is Centra Financial Holdings first acquisition since forming in 2000.
“Centra is a unique community bank and will be an excellent complement to our type of customer service,’ said Ryan Glista, Smithfield State Bank president.
“We believe that this transaction is in the best interest of our bank. We are impressed with Centra’s commitments to customer service and to its employees, as well as its community support and involvement. We are pleased with Centra’s strong regulatory and financial positions,’ Glista said.
“The great thing about this merger is that the bank will continue delivering the same high level of reliable hometown service to the hardworking people of Fayette County,’ Glista said.
Douglas J. Leech, Centra chairman and chief executive officer, said the acquisition is attractive “because it will allow Centra to expand our Morgantown bank across the state line.
“Smithfield is Fayette County’s oldest bank, with a reputation for excellent customer service. We look forward to continuing that tradition,’ Leech added.
Leech said earlier Centra had been interested in coming to Fayette County for “some time.’
Although the name of the 80-year-old Smithfield State Bank will disappear, Centra will continue to run it as a “locally owned and operated bank,’ Leech said.
“All the decisions will be made locally. All the decisions will be made right here in Fayette County,’ said Leech, a Smithfield native.
“We will form a bank holding company with its own board whose members will be from this area. Loans here will be approved by Fayette County people, not someone in another state. Our product prices and offerings will be tailored to Fayette County. All hiring decisions will be made here in Fayette County,’ Leech said.
“We will bring all the latest technological advances to our customers,’ including online banking and bill paying through Centra’s Web site, long-term fixed rate mortgages, a first-time home buyer program and other products,’ he said.
Part of Centra’s banking model and its philosophy, Leech added, is “placing a great deal of weight on the character (of its customers) as opposed to a score sheet. We will be a local bank with local management that will keep its decision-making close to our customers.’
Leech explained that model has helped make Centra one of the nation’s most successful new banks.
“This acquisition is a logical fit for our company both geographically and philosophically. Both organizations know the value of doing business with the philosophy of local management and local decision-making. Personally, this is an exciting transaction for me since I have many ties to Fayette County,’ Leech said. His parents, Joe and Doris Leech, live in Smithfield R.D. 3.
“I was born and raised and spent much of my working career here (in Fayette County) and have many family members and friends in the area. The existing Smithfield (bank) headquarters building is where my great-grandfather, Jesse Leech, served as cashier of the bank in the 1920s. I still maintain strong friendships with many of the employees and shareholders of Smithfield,’ he added.
Centra is ranked fourth for growth and success of all 680 new banks started in 2000, according to Danielson & Associates, a Rockville, Md., investment banking firm. Centra also ranks first in mortgage lending in Monongalia County, W.Va., and exceeded its first year growth forecast of $28 million in its first two weeks of operation, Leech said.
About 700 local shareholders own Centra Financial Holdings. There is a long waiting list for others who would like to buy Centra stock, Leech added.
Centra’s total assets are about $578 million. Total deposits as of the end of 2005 were about $501 million and total loans about $485 million. Centra’s net income for 2005 reached more than $3.9 million, after taxes.
Leech, who has more than 25 years in banking, said Centra also is focused on the community, making donations of more than $128,000 in 2005 to a variety of groups. Centra employees are involved in more than 60 charities and non-profit organizations.
Centra employs about 170 people.
Leech said he is proud of his staff as well as the members of the Centra boards of directors. There are separate boards for the Morgantown and Martinsburg operations.
“Our board members are all entrepreneurs,’ and include Arthur Gabriel, president of Gabriel Brothers Inc., and Milan Puskar, chairman of Mylan Labs.
“That’s the kind of corporation we want for Fayette County, a board that is a who’s who of local business and civic leaders,’ he said.