SEC Reviewing Pending Acquisition of Sentry Trust Co., One of First Trust Firms Serving CUs

LEWISBURG, Pa. - Launched seven years ago to offer trust services and wealth management to credit unions, Sentry Trust Co. is on schedule to be acquired by Sun Bancorp Inc. by early December. The SEC is conducting a more extensive review of the acquisition as it has done with other companies in concordance with provisions of the Sarbanes-Oxley Act, said Charles Nelson, president/CEO of Sentry. Meanwhile, "it's business as usual," Nelson said. "The market has improved substantially and it's a more advantageous environment to work in." Under the terms of the acquisition, which has been approved by the companies' board of directors but awaits regulatory and Sentry shareholder approval, Sun Bancorp will pay $16.8 million in stock and cash for Sentry Trust, with at least 60% in the form of common stock. The acquisition would fold the bank holding company's wealth management and retail investment departments into Sentry's existing operations. Sentry has $430 million in assets under management, 1,300 trust clients and 3,000 brokerage and insurance clients including members at Patriot Federal Credit Union, Community of Healthcare Employees Credit Union and two area banks. As the only credit union shareholder in the CUSO - and the largest among 17 others at the time when Sentry initially formed, Patriot FCU would eventually have to divest its 20% share because after Sentry acquired the trust departments at Fulton County National Bank in 1999 and First National Bank of Greencastle in 2001, NCUA's "50 plus one" regulation kicked in, which requires CUSOs to serve a majority credit union member base, Nelson said. Sun Bancorp intends to retain all 30 of Sentry's employees with the trust company remaining in its current headquarters, Nelson said, adding the acquisition will see at least eight Sun Bancorp employees transitioning in. In addition, the company will still operate as Sentry Trust Co. with Nelson continuing to oversee operations. The deal will also expand Sentry's presence from two to eight more counties here. Sun Bancorp President/CEO Robert McCormack said "the Sentry team clearly enhances our company's ability" to "continue to focus on serving as a trusted advisor to our clients and providing the expertise to meet their long and short term needs." Sun Bancorp is a $1 billion company with 23 offices and 45 ATMs in six counties here. -msamaad@cutimes.com