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BUSINESS
First Sentry plans to acquire Guaranty
HUNTINGTON -- First Sentry Bancshares Inc. announced Monday that it is acquiring Guaranty Financial Services in a merger.
First Sentry is the parent company of First Sentry Bank and Guaranty is the parent company of Guaranty Bank & Trust. Following the acquisition, which still awaits regulatory approval, the combined bank will operate as First Sentry Bank.
"These are two strong banks that will become stronger as one with this proposed merger," said Geoffrey Sheils, president and CEO of First Sentry Bancshares. "We're both independent banks located in Huntington, so we have the same common mission. There was no reason to continue bumping heads."
First Sentry Bank began operations in October 1996, and as of July 31, 2008, had total assets of $300.4 million. Guaranty Bank & Trust began operations in 1999. Following the merger, the combined entity is expected to have over $425 million in assets and will be the largest bank in Cabell County, according to a prepared release.
First Sentry had approximately $2.5 million in net income in 2007, compared to $2.37 million the previous year, according to the Federal Deposit Insurance Corporation. Meanwhile, Guaranty Bank & Trust had $665,000 in net income in 2007, up $12,000 from 2006.
Sheils and Marc Sprouse, president of Guaranty Financial Services, said customers and employees of both banks should expect a seamless merger.
"We are not projecting job losses at all right now," Sheils said. "We're going to need experienced employees to get us to the next level. Over time, we foresee an increase in our employee base as a result of this merger."
Sprouse will become First Sentry's executive vice president and sit on its board of directors.
"This gives us a greater opportunity to increase our market share and hire more people in the future," Sprouse said. "We have to play by the same rules as the larger banks in town. Merging gives us more of an opportunity to compete and spread the costs of doing business over a broader base."
The banks will continue to operate from their existing locations, Sheils said. First Sentry is located at 823 8th St. and on Merritt's Creek Road in Barboursville. Guaranty Bank & Trust has offices at 517 9th St., 5604 U.S. 60 East and on 2nd Street in Hamlin.
The merger also brings to a halt Guaranty's plans to build its new headquarters on 8th Street between 5th and 6th avenues. Demolition began last year in the 500 block of 8th Street to make way for the new building.
"All of that is on hold," Sprouse said. "We own almost that entire block except for Jeff's Bike Shop and a few pieces of property on the corner of 6th Avenue and 7th Street. It's uncertain after the merger whether there will be a need for a banking facility there."
First Sentry will issue to Guaranty shareholders 1.176 shares of First Sentry stock for each outstanding share of Guaranty stock, according to the prepared release. Shareholders must approve the merger along with the FDIC, Securities and Exchange Commission and the West Virginia Division of Banking.
The approval process is expected to take six to seven months, Sheils said.
