Carolina Financial Corporation announces agreement to acquire Congaree Bancshares, Inc.
January 6, 2016
Carolina Financial Corporation (NASDAQ: CARO), the parent company of CresCom Bank, and Congaree Bancshares, Inc. (OTC Pink: CNRB), the parent company of Congaree State Bank, announced the signing of a definitive agreement pursuant to which Carolina Financial Corporation will acquire Congaree Bancshares, Inc. in a cash and stock transaction with a total current value of approximately $16.3 million, which includes the assumption of approximately $1.6 million in preferred stock.
Upon completion of the transaction, the combined company will have approximately $1.5 billion in assets. Carolina Financial Corporation anticipates this transaction will be immediately accretive to earnings per share (before acquisition costs) with tangible book value per share recovered in less than three years.
“We are excited to expand our franchise into the Columbia market and to partner with such a quality community bank,” said Jerry Rexroad, Chief Executive Officer of Carolina Financial Corporation. “With our strong capital base and historical success in partnership growth, we are well-positioned to capitalize on this strategic partnership.”
Charles Kirby, President and Chief Executive Officer of Congaree Bancshares, Inc., commented, “This transaction is a combination of two companies with very similar philosophies, cultures and core values. Our current branch and lending personnel will remain in place, and we expect to add new people and increase our market presence as we join the Carolina Financial Corporation team. With strong capital support, we are excited to have the resources to grow and expand with the ability to better meet our client’s needs and be a significant contributor to the economic growth in the Columbia market.”
Under the terms of the acquisition agreement, Congaree Bancshares, Inc. shareholders will have the right to receive $8.10 for each share of Congaree Bancshares, Inc. common stock, payable, at their election and subject to certain limitations, in cash or in shares of Carolina Financial Corporation common stock based upon a fixed exchange ratio of 0.4806. Per the agreement, 40% of the consideration will be paid in cash and the balance (60%) will be in newly issued shares of Carolina Financial Corporation common stock.
The agreement has been unanimously approved by the boards of directors of both companies. The transaction is anticipated to close in the second quarter of 2016, subject to customary closing conditions, including regulatory approvals and Congaree Bancshares, Inc. shareholder approval.
Carolina Financial Corporation is being advised by Nelson Mullins Riley & Scarborough LLP as legal counsel. Congaree Bancshares, Inc. is being advised by Banks Street Partners, LLC as financial advisor and Smith Moore Leatherwood, LLP as legal counsel.
About Carolina Financial Corporation
Carolina Financial Corporation (NASDAQ: CARO) is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company. As of September 30, 2015, Carolina Financial Corporation had approximately $1.3 billion in total assets and Crescent Mortgage Company originated loans in 45 states and partnered with approximately 2,000 community banks, credit unions and mortgage brokers. In 2014, Carolina Financial Corporation was added to the Nasdaq Community Bank Index (ABAQ) by the American Bankers Association. It also ranked #1 on American Banker’s 2015 list of “Top 200 Community Banks and Thrifts as Ranked by Three-Year Average ROE.” During 2014, CresCom Bank completed two branch acquisitions and grew from 11 to 26 branch locations. In addition, in 2014 the Company added loan production offices in Greenville, SC, and Wilmington, NC. In August 2015, the Company opened a full-service branch inGreenville, SC. On December 14, 2015, the Company closed a public offering of 2,262,296 shares of its common stock with net proceeds of approximately $32.2 million after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company.
About Congaree Bancshares, Inc.
Congaree Bancshares, Inc. is a South Carolina corporation which operates as the holding company for Congaree State Bank, a state chartered banking institution headquartered in Cayce, SC. Since inception in 2006, Congaree has provided banking products and services including commercial, consumer and mortgage loans to individuals, small- to medium-sized businesses, and professionals in the Columbia market. As of September 30, 2015, Congaree Bancshares, Inc. had consolidated assets of $116.7 million, deposits of $95.8 million and shareholders’ equity of $13.6 million.
