TrustAtlantic Bank is expanding its network of branches in Wake County by acquiring a North Raleigh branch from Harrington Bank.
Raleigh-based TrustAtlantic announced this week that it has agreed to acquire a branch on Falls River Avenue from Harrington, which is headquartered in Chapel Hill. Financial details of the deal, which is expected to be completed in the second quarter, weren't disclosed.
TrustAtlantic will have five branches -- three in Raleigh, one in Cary and one in Greenville -- after completing the deal. Harrington will have three branches post-deal, all in Chapel Hill.
TrustAtlantic CEO Jim Beck described the deal as "a win-win," feeding TrustAtlantic's growth ambitions while enabling Harrington to focus on the Chapel Hill market.
Harrington CEO Larry Loeser said that the bank wasn't looking to sell its sole Raleigh branch but decided to do so after being approached by TrustAtlantic.
Harrington opened the Raleigh branch in 2007 with plans to open other branches in the area, but the recession curtailed those plans.
"It has been kind of hanging out there by itself," Loeser said.
Moreover, he noted, "the proceeds (from the sale) will strengthen Harrington. That's always a good thing."
For all of 2012 TrustAtlantic posted $5.3 million in net income, according to data filed with the Federal Deposit Insurance Corp. The bank's net income for the year was bolstered by a $3 million one-time tax benefit in the second quarter, Beck said.
Harrington posted a $1.7 million loss last year, according to FDIC data.
Beck said TrustAtlantic, which was founded in 2007, likely would have sought a location for a brand-new Wake County branch later this year if the Harrington opportunity hadn't turned up. Acquiring a branch, he added, can be almost instantly profitable, but starting one up from scratch can require three or more years of operating before making money.
"Strategically, we are interested in growing our franchise," he said. "And our preference is to grow in the markets where we already are...Wake County in particular is one of the best markets in the country."