Fed Analysis Found CU Competition Mitigated Anti-Competitive Impacts of Bank Merger

In its approval of First Citizens BancShares (Raleigh, NC) acquisition of Entegra Financial Corp. and its subsidiary Entegra Bank (Franklin, NC), the Federal Reserve Board (Board) found that in several North Carolina banking markets that credit unions exerted competitive influences mitigating the anti-competitive effects of the merger.

The Board specifically evaluated the competitive impact of the merger on the banking markets of Cherokee, Transylvania County, Jackson, and Macon County.

The Board found in these four banking markets, North Carolina’s State Employee’s Credit Union (SECU) exerted a competitive influence.

For example, the Board found in the Cherokee banking market, which is comprised of Cherokee and Clay Counties, that 21 percent of the residents were members of SECU. In addition, SECU operates street-level branches that are easily accessible to residents in the market and controlled approximately $166 million in deposits in the Cherokee banking market. Board also noted that there was another credit union in the market offered a wide range of products and its field of membership included almost all of the residents in the banking market.

In the other three banking markets, almost 28 percent of market residents in the Jackson banking market, approximately 21 percent of market residents in the Macon County banking market, and 12 percent of market residents in the Transylvania County banking market were members of the SECU. In addition to SECU, two of the banking markets has other credit union competitors.

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