Raleigh, N.C.-based First-Citizens Bank & Trust Co. is acquiring Spartanburg, S.C.-based First South Bancorp Inc.
Under the deal, cash consideration of $1.15 per share will be paid to First South Bancorp shareholders for each common share held. Assuming the conversion of series A preferred shares into common stock, this equates to a total transaction value of $37.5 million.
The deal is expected to close as soon as the second quarter.
As of Sept. 30, 2018, First South Bancorp reported $237 million in consolidated assets, $195 million in deposits and $173 million in gross loans, according to a press release. First-Citizens Bank is a unit of First Citizens BancShares Inc., which has assets of $35 billion.
On an aggregate basis, SNL calculates the deal value to be 186.3% of common equity, 16.32% of assets and 19.81% of deposits.
SNL valuations for bank and thrift targets in the Southeast region between Jan. 10, 2018, and Jan. 10, 2019, averaged 157.06% of book, 168.63% of tangible book and had a median of 25.73x last-12-months earnings, on an aggregate basis.
The deal has a one-day premium of 22.34%, based on First South Bancorp's closing price of 94 cents per share as of Jan. 9, and a one-month premium of 28.49%, based on First South Bancorp's closing price of 89.5 cents per share as of Dec. 10, 2018.
First Citizens BancShares will expand in Beaufort County, S.C., by one branch to be ranked ninth with a 3.77% share of approximately $4.33 billion in total market deposits. The company will expand in Greenville County, S.C., by one branch to be ranked 10th with a 3.74% share of approximately $11.63 billion in total market deposits. It will also expand in Spartanburg County, S.C., by two branches to be ranked third with a 12.54% share of approximately $5.06 billion in total market deposits.
Banks Street Partners LLC acted as financial adviser and rendered a fairness opinion to the board of First South Bancorp in connection with the transaction. Ward and Smith PA represented First Citizens Bank in the deal; Alston & Bird LLP represented First South Bancorp.