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First Charter Jumps on Buyout

Fifth Third comes calling.

First Charter's

(FCTR) - Get First Trust Lunt U.S. Factor Rotation ETF Report

shares popped 40% after it agreed to be acquired by

Fifth Third Bancorp

(FITB) - Get Fifth Third Bancorp Report

for $1.1 billion.

Fifth Third of Cincinnati agreed to pay $31 a share, a 53% premium to First Charter's closing price on Wednesday. Approximately 70% of the price will be paid in common stock, while the rest will be paid in cash to the Charlotte, N.C., bank's shareholders, Fifth Third said.

The deal is expected to be completed in the first quarter.

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The deal moves Fifth Third into the Charlotte area and further expands it into Georgia. First Charter operates 59 branches, mostly in North Carolina and a few in Atlanta.

As the Midwest economy slows, the $101 billion-asset company has been focusing its efforts on expanding further into the Southeast, particularly in Florida.

Fifth Third agreed in May to purchase

R&G Financial's


Florida banking franchise, which includes three branches in Augusta, Ga. Fifth Third is paying $288 million for the Puerto Rican bank's R-G Crown Bank. It has also agreed to assume $50 million in trust preferred securities. The deal is expected to close in the fourth quarter.

First Charter "furthers our penetration into fast-growing Southeastern metropolitan markets at a reasonable price," said Kevin Kabat, Fifth Third's president and CEO. "The addition of First Charter provides us with an entry into attractive North Carolina market and further diversifies our footprint into new, higher growth markets."

Shares of First Charter rose $7.93 to $28.18 on Thursday. Fifth Third's stock fell $1.11 to $36.27.