OREANDA-NEWS. June 13, 2017. Carolina Financial Corporation (Nasdaq:CARO) (“Carolina Financial”) and First South Bancorp, Inc. (Nasdaq:FSBK), the parent company of First South Bank (together, “First South”) announced today the signing of a definitive merger agreement. 

First South, which is headquartered in Washington, North Carolina, currently operates 28 banking locations across the Research Triangle and eastern regions of North Carolina.  As of March 31, 2017, First South reported assets of $1.0 billion, gross loans of $730 million and deposits of $920 million.

“We are excited about the opportunity to enhance our scale in North Carolina and to enter Raleigh and Durham, two of the fastest growing markets in the Southeast, as a result of this partnership,” said Jerry Rexroad, Chief Executive Officer of Carolina Financial.

Upon completion of the acquisition, the combined company will have approximately $3.2 billion in assets, $2.2 billion in loans and $2.5 billion in deposits. This transaction will further solidify Carolina Financial’s position as one of the largest Carolinas-based community banks.  The transaction provides core funding and economy of scale benefits in attractive markets throughout North Carolina.  First South is a franchise that has developed long-term relationships over the course of its 100+ year history.

Bruce Elder, President and Chief Executive Officer of First South, commented, “We are excited about partnering with a high-performing company like Carolina Financial.  First South shareholders and customers will be rewarded as the combination of these two banks will provide superior financial performance along with an exceptional customer experience.  We will leverage the new resources and products available to us through CresCom Bank to attract new customers and expand our existing relationships.”

Bruce Elder will be named President of North Carolina Banking for Carolina Financial’s bank subsidiary, CresCom Bank.

The merger agreement has been unanimously approved by the boards of directors of each company. The transaction is expected to close in the fourth quarter of 2017 and is subject to customary conditions, including both regulatory and shareholder approvals.  Subject to the terms of the merger agreement, First South shareholders will receive 0.52 shares of Carolina Financial common stock for each share of First South’s common stock, which equates to an aggregate deal value of $162 million based on Carolina Financial Corporation’s closing stock price of $32.49 as of June 9, 2017. 

Keefe, Bruyette & Woods, Inc. served as financial advisor and Nelson Mullins Riley & Scarborough LLP provided legal counsel to Carolina Financial.  Raymond James served as financial advisor and Wyrick Robbins Yates & Ponton LLP served as legal counsel to First South.

Carolina Financial Corporation (NASDAQ:CARO) is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company.  As of March 31, 2017, Carolina Financial Corporation had approximately $2.2 billion in total assets and Crescent Mortgage Company was licensed to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers.  During 2014, CresCom Bank completed two branch acquisitions and grew from 11 to 26 branch locations.  In addition, in 2014 the Company added loan production offices in Greenville, SC, and Wilmington, NC.  In August 2015, the Company opened a full-service branch in Greenville, SC.  On December 14, 2015, the Company closed a public offering of approximately 2.26 million shares of its common stock with net proceeds of approximately $32.2 million, net of related expenses. On June 11, 2016, Carolina Financial completed its acquisition of Congaree Bancshares Inc.  On January 5, 2017, the Company closed a public offering of approximately 1.8 million shares of its common stock with net proceeds of approximately $47.7 million, net of related expenses. On March 18, 2017, Carolina Financial completed its acquisition of Greer Bancshares Incorporated.  

About First South Bancorp, Inc.

First South Bancorp, Inc. (NASDAQ:FSBK) is a Virginia corporation that serves as the holding company for First South Bank, a North Carolina-chartered commercial bank. The Company was originally incorporated as a Delaware corporation in 1996.  In 1999, FSBK changed its state of incorporation from Delaware to Virginia.  First South Bank has one significant operating segment, the providing of general commercial banking services to its markets located in the state of North Carolina.