Southeastern Bank Financial Corp (OTCMKTS:SBFC) shares rose 35.63% on Friday to $46.52 after the company announced its merger with South State Corp. The merged entity will be called South State Bank and was unanimously approved by both companies’ board of directors. The deal is still pending shareholder and regulatory approval and is expected to close in the first quarter of 2017.
Southeastern Bank Financial Corp shareholders will receive 0.7307 shares of South State Bank for every common stock of SBFC. Stock issuance is expected to amount to $335 million in aggregate. Southeastern Bank Financial Corp has a market cap of $425.69 million at 6.75 million shares outstanding.
Shares are trading in a 52-week range of $29.75 to $46.80 so the price is already at the upper limit but might be poised for further upside. Since Southeastern Bank Financial Corp has around $1.9 billion assets and South State Corp has $8.9 billion, the merged entity will have more than $10 billion in assets. In addition, South State Bank will be poised for further growth and acquisition across three states and 133 locations.
According to South State Corp CEO Robert Hill, Jr., the merger is a natural fit as it would help with their South Carolina and Augusta presence. South State Corp is the largest bank holding company headquartered in South Carolina and 24 South Carolina counties, 13 Georgia counties and four North Carolina counties.
This is a 30-year-old company that is number two in market share in Augusta,” Hill said. “It’s an older bank with a deep penetration in the Augusta market, and we didn’t serve the Aiken-Augusta area.”
Southeastern Bank Financial Corp offers a range of lending services, including real estate, commercial and consumer loans, to individuals, small to medium-sized businesses and professionals. It also offers noninterest-bearing deposits, negotiable order of withdrawal accounts, savings, money management accounts and time deposits.