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Monday's Bank Stocks: First South Bancorp rises on deal news

Washington, N.C.-based First South Bancorp Inc. gained 8.56% to $15.85 on Monday, June 12, following news it will be acquired by Charleston, S.C.-based Carolina Financial Corp.

Meanwhile, Carolina Financial slipped 3.97% to $31.20. North Carolina bank deals have become more common in 2017. According to Carolina Financial executives, the all-stock deal, valued at an aggregate of $161.8 million, provides the company an entrance to coveted markets in the Southeast.

In an interview with S&P Global Market Intelligence, Lee Bradley, a senior managing director at Community Capital Advisors and an investment banker active in the Southeast, said that a dearth of community banks has indeed emerged in North Carolina, and that the acquisition will provide Carolina Financial an opportunity for meaningful customer growth and revenue expansion in coming years.

"There just are not that many smaller banks left in the state," Bradley said. "So absolutely, they could step in and scale up."

The SNL U.S. Bank Index added 0.03% to 541.97, and the SNL U.S. Thrift Index fell 0.33% to 918.55. In the broader markets, the Dow Jones Industrial Average slid 0.17% to 21,235.67, the S&P 500 slipped 0.10% to 2,429.39 and the Nasdaq composite index fell 0.52% to 6,175.47.

The nation's largest banks were somewhat mixed for the day, as Bank of America Corp. gained 0.46% to $23.78, Citigroup Inc. fell 0.20% to $64.32, JPMorgan Chase & Co. ticked up 0.02% to $86.98 and Wells Fargo & Co. added 0.54% to $54.09.

MidSouth Bancorp Inc. was down 4.56% to $11.50, after it disclosed that the Office of the Comptroller of the Currency determined its unit, MidSouth Bank NA, to be in "troubled condition." The OCC found deficiencies in asset quality, credit administration, and strategic planning, among others, according to a Form 8-K filed June 12. Last week, management said it anticipated a formal enforcement action from the regulator, and is urgently moving to turn the struggling bank around.

Among other notable movers, Seacoast Banking Corp. of Florida gained 2.87% to $25.41, Zions Bancorp. added 1.39% to $42.93, Berkshire Hills Bancorp Inc. rose 1.24% to $36.75, BNC Bancorp fell 4.28% to $34.65, Pinnacle Financial Partners Inc. dropped 3.91% to $66.40, FB Financial Corp. lost 2.60% to $35.90 and Banc of California Inc. declined 2.21% to $22.10.

There were no notable movers in the thrift space.

Elsewhere in banking, two new financial institutions are in organization. Former SouthCoast Community Bank director and automobile dealer Tommy Baker is planning to launch a bank called Beacon Community Bank in Charleston, S.C., The (Charleston) Post and Courier reported June 8. Meanwhile, on June 6, Social Finance Inc. applied with the Federal Deposit Insurance Corp. to obtain a bank charter, according to an FDIC release dated June 12.

Market prices and index values are current as of the time of publication and are subject to change.