Olanta, S.C.-based Citizens Bancshares Corp. agreed to buy Hartsville, S.C.-based Regional Bankshares Inc. in a cash-and-stock deal valued at about $11.3 million, based on an assumed Citizens' stock value of about $30.00 per share as of May 17.
Regional shareholders will have the right to receive $15.00 in cash or 0.50 shares of Citizens common stock, or a combination thereof, for each share of Regional common stock or series A preferred stock, subject to proration. The proration ensures that, excluding any dissenter shares, 40% and 60% of the outstanding Regional shares will be exchanged for $15.00 in cash and for Citizens common shares, respectively.
The transaction is subject to regulatory approval and approval by Regional shareholders. It is anticipated to close near the end of the third quarter.
SNL calculates the deal value on an aggregate basis to be 112.53% of common equity, 8.13% of assets and 9.82% of deposits.
SNL valuations for bank and thrift targets in the Southeast region between May 17, 2017, and May 17, 2018, averaged 152.63% of book, 160.74% of tangible book and had a median of 25.87x last-12-months earnings, on an aggregate basis, and averaged 164.35% of book, 176.85% of tangible book and had a median of 24.69x last-12-months earnings, on a per-share basis.
The deal has a one-day premium of 57.89%, based on Regional Bankshares' May 16 closing price of $9.50, and a one-month premium of 57.89%, based on its April 16 closing price of $9.50.
Regional Chairman Gosnold Segars Jr. is expected to become a Citizens director, while other current Regional directors will have the opportunity to serve as members of the Hartsville advisory board of Citizens unit Citizens Bank. For a three-year period after deal completion, Regional President and CEO Curtis Tyner Sr. will serve the combined company in a consulting role.
On a pro forma combined basis, the combined company would have had total assets of approximately $550 million, total deposits of $476 million and total loans of $356 million, as of March 31, according to the merger release.
SNL data shows that as of March 31, Citizens Bank had $443.1 million in assets. Regional is the parent of Heritage Community Bank, which had $111.0 million in assets as of the same date.
Citizens Bancshares Corp. will enter Kershaw County, S.C., with one branch to be ranked eighth with a 2.36% share of approximately $742.17 million in total market deposits. The company will enter Darlington County, S.C., with one branch to be ranked fifth with an 8.92% share of approximately $603.76 million in total market deposits; and it will enter Chesterfield County, S.C., with one branch to be ranked sixth with a 5.66% share of approximately $415.64 million in total market deposits.
Smith Capital LLC and Haynsworth Sinkler Boyd PA served as Citizens' financial adviser and legal counsel, respectively. FIG Partners LLC acted as financial adviser and Nelson Mullins Riley & Scarborough LLP served as legal counsel for Regional.
SNL is owned by S&P Global Market Intelligence.