South State Corp. and Park Sterling Corp. jointly announced today the signing of a definitive merger agreement. According to a press release, combining the two companies will create a franchise with $14.5 billion in assets operating throughout South Carolina, North Carolina, Virginia and Georgia.
Under the terms of the agreement, shareholders of Park Sterling will receive 0.14 shares of South State common stock for each share of Park Sterling common stock. The aggregate consideration is valued at approximately $690.8 million, based on 53,112,726 shares of Park Sterling common stock outstanding as of March 31 and on South State’s April 26 closing stock price of $91.90.
“Our partnership with Park Sterling is a natural next step. We both have a common vision for building a quality regional bank in the Southeast, and this is a significant step forward in accomplishing that goal,” Robert R. Hill Jr., CEO of South State Corp., said in the release. “We are fortunate to have two great teams that operate in dynamic markets and we are excited about the opportunities this merger creates.”
South State is the largest bank holding company headquartered in South Carolina. The company’s primary subsidiary, South State Bank, currently has operations in 25 S.C. counties, 15 counties in Georgia and four in North Carolina.
“Our team is proud to be partnering with South State to create what we believe will come to be recognized as the preeminent regional community banking franchise in the Southeast,” James C. Cherry, CEO of Park Sterling, said in a statement. “This combination will substantially fulfill our vision of truly becoming big enough to have the talent and services necessary to help customers achieve their financial aspirations while still remaining small enough and passionate enough to care that they do.”
Headquartered in Charlotte, Park Sterling Corp. is the holding company for Park Sterling Bank, which has over 50 branches across the Carolinas, Virginia and Georgia. This opportunity will allow for a deeper and denser market presence across the Southeast, a more robust commercial business strategy, a greater presence in Charlotte and entry into the Richmond market, according to a press release.
As of March 31, Park Sterling Corp. had approximately $3.3 billion in assets, $2.5 billion in deposits and $2.5 billion in loans. Upon completion of the transaction, the combined company will have approximately $14.5 billion in assets, $11.5 billion in deposits and $10.4 billion in loans.
The merger agreement has been unanimously approved by the board of directors of each company. Pending regulatory and shareholder approvals and other customary closing conditions, the closing is anticipated to occur in the fourth quarter of this year and the system conversion is scheduled to occur in the first quarter of 2018. At closing, Park Sterling Corp. will be merged into South State Corp., and Park Sterling’s bank subsidiary, Park Sterling Bank, will be merged into South State’s bank subsidiary, South State Bank.
Upon consummation of the merger, Cherry will be appointed to the combined company’s board of directors in addition to another individual to be mutually agreed upon and named at a later date.