Park Sterling Corporation (Nasdaq:PSTB), the holding company for
Park Sterling Bank, and Citizens South Banking Corporation
(Nasdaq:CSBC), the holding company for Citizens South Bank, jointly
announced today the signing of a definitive merger agreement under
which Park Sterling will acquire Citizens South for a total value
of approximately $77.8 million, excluding the exchange of $20.5
million in preferred stock issued to the United States Department
of the Treasury in connection with Citizens South's participation
in the Small Business Lending Fund.
Upon completion of the transaction, the combined company will
have approximately $2.2 billion in total assets, $1.7 billion in
total deposits, $1.4 billion in total loans, and a network of 45
branches in the Carolinas and North Georgia. The combined company
will rank as the largest community bank in the
Charlotte-Gastonia-Rock Hill MSA, based on the most recent
available deposit market share data, with 14 branches and pro forma
deposits of approximately $771 million (source: SNL Financial; June
30, 2011).
The merger agreement has been unanimously approved by the board
of directors of each company. Closing of the transaction, which is
expected to occur in the fourth quarter of 2012, is subject to
customary conditions, including approval by Citizens South's
shareholders, approval by Park Sterling's shareholders and receipt
of regulatory approval. In addition, Park Sterling's
obligation to complete the transaction is conditioned on the FDIC's
consent to the assignment of existing FDIC loss-share agreements to
which Citizens South is a party. At closing, Citizens South
Banking Corporation will be merged into Park Sterling Corporation
and, as soon as practicable following the closing, it is
anticipated that Citizens South Bank will merge with and into Park
Sterling Bank.
James C. Cherry, Chief Executive Officer of Park Sterling
commented, "Our proposed merger with Citizens South is the
culmination of extensive due diligence and thoughtful discussions,
which we expect to result in a strong business and cultural fit. We
believe this transformational partnership will be positive for our
shareholders, customers, employees and communities. Citizens
South's footprint is virtually a perfect fit with Park Sterling's.
In combination, we will be the largest community banking franchise
in the very desirable Charlotte-Gastonia market. In addition, our
combined footprint will extend through the attractive Upstate
region of South Carolina, including the high growth
Greenville-Spartanburg corridor, into North Georgia. We will also
enjoy a very healthy balance sheet and powerful earnings
capabilities. We are proud to partner with Kim Price and his
capable team at Citizens South and look forward to continuing their
company's 107 year history of providing outstanding service to
their communities."
Kim S. Price, President and Chief Executive Officer of Citizens
South, will be appointed as a member and vice chairman of Park
Sterling's board of directors. He will transition from executive
management to a consulting role with the combined company after
closing. In addition, Ben R. Rudisill, II, currently a
director of Citizens South, will be appointed as a member of Park
Sterling's board of directors.
"We are very excited about entering into this partnership with
Park Sterling," stated Mr. Price. "We believe our combined
company will be quickly recognized as the premier community bank in
the Charlotte-Gastonia market given our branch network, product
capabilities, service offerings, banking talent, balance sheet
strength and earnings potential. In addition, Park Sterling's
significant presence in the Upstate region of South Carolina
provides a bridge to Citizens South's branches in North
Georgia."
Under the terms of the merger agreement, Citizens South
shareholders will have the right to receive either $7.00 in cash or
1.4799 Park Sterling shares for each Citizens South share they
hold, subject to the limitation that the total consideration will
consist of 30.0% in cash and 70.0% in Park Sterling shares. Those
Citizens South shares exchanged for stock will convert to Park
Sterling shares in what is intended to be a tax-free exchange. Cash
will also be paid in lieu of fractional shares. The
transaction value at the time of the proposed merger may change due
to potential fluctuations in the price of Park Sterling stock.
As part of the combined company's commitment to the
Charlotte-Gastonia market, Messrs. Cherry and Price today announced
Park Sterling's intent to donate $500,000 over the next ten years
to the Gaston County Community Foundation to support local
charities. This philanthropic gift will be administered on behalf
of Park Sterling by Mr. Price, Eugene R. Matthews and Richard K.
Craig, each of whom is currently a director of Citizens South. In
addition, the combined company has committed to maintain an
operations center in Gastonia, North Carolina, where Citizens South
is headquartered.
Sandler O'Neill + Partners, L.P. served as financial advisor to
Park Sterling, and Keefe, Bruyette & Woods, Inc. served as
financial advisor to Citizens South. McGuireWoods LLP served as
outside legal counsel to Park Sterling, while Luse Gorman Pomerenk
& Schick, P.C. served as outside legal counsel to Citizens
South.
Webcast
Park Sterling Corporation and Citizens South Banking Corporation
will host a conference call this morning at 8:30 a.m., EDT (May 14,
2012). The conference call can be accessed by dialing (877)
317-6789 and requesting the Park Sterling Corporation
call. Listeners should dial in 10 minutes prior to the start
of the call. The presentation slides will be available on the
respective websites of Park Sterling and Citizens South at
www.parksterlingbank.com and www.citizenssouth.com. A replay
of the call will also be available approximately one hour after the
end of the call through 9:00 a.m., EDT on May 29, 2012. To
access the replay dial (877) 344-7529, conference code
10014376.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO
FIND IT
In connection with the proposed merger, Park Sterling will file
with the Securities and Exchange Commission a Registration
Statement on Form S-4 that will include a joint proxy statement of
Park Sterling and Citizens South that also constitutes a prospectus
of Park Sterling, as well as other relevant documents concerning
the proposed merger. INVESTORS ARE STRONGLY URGED TO
READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/
PROSPECTUS REGARDING THE PROPOSED MERGER WHEN THEY BECOME AVAILABLE
AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED
MERGER.
A free copy of the joint proxy statement/prospectus, as well as
other filings containing information about Park Sterling and
Citizens South, may be obtained after their filing at the SEC's
Internet site (http://www.sec.gov). In addition, free copies of
documents filed with the SEC may be obtained on the respective
websites of Park Sterling and Citizens South at
www.parksterlingbank.com and www.citizenssouth.com.
Participants in Solicitation
Park Sterling and Citizens South and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in connection with the proposed merger.
Information about the directors and executive officers of Park
Sterling and Citizens South and other persons who may be deemed
participants in this solicitation will be included in the joint
proxy statement/prospectus. Information about Park Sterling's
executive officers and directors can be found in Park Sterling's
definitive proxy statement in connection with its 2012 Annual
Meeting of Shareholders filed with the SEC on April 16, 2012.
Information about Citizens South's executive officers and directors
can be found in Citizens South's definitive proxy statement in
connection with its 2012 Annual Meeting of Stockholders filed with
the SEC on April 13, 2012. Free copies of these documents can be
obtained from the sources indicated above.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any offer, solicitation or sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
About Park Sterling Corporation
Park Sterling Corporation is the holding company for Park
Sterling Bank, headquartered in Charlotte, North Carolina. Park
Sterling's primary focus is to provide financial services to small
and mid-sized businesses, owner-occupied and income producing real
estate owners, professionals and consumers doing business or
residing within its target markets. Park Sterling offers a full
array of banking services, including a diverse wealth management
group. Park Sterling is focused on building a banking franchise
across the Carolinas and Virginia that is noted for sound risk
management, superior customer service and exceptional client
relationships. For more information, visit
www.parksterlingbank.com. Park Sterling's shares are traded on
NASDAQ under the symbol PSTB.
About Citizens South Banking Corporation
Citizens South Bank was founded in 1904 and is headquartered in
Gastonia, North Carolina. Deposits are FDIC insured up to
applicable regulatory limits. At March 31, 2012, the Company had
$1.1 billion in assets with 21 full-service offices in the
Charlotte and North Georgia regions, including Gaston, Iredell,
Rowan, Mecklenburg, and Union counties in North Carolina, York
County in South Carolina, and Towns, Union, Fannin, and Gilmer
counties in Georgia. Citizens South Bank is an Equal Housing Lender
and Member, FDIC. The Bank is a wholly-owned subsidiary of Citizens
South Banking Corporation, and shares of the common stock of the
Company trade on the NASDAQ Global Market under the ticker symbol
"CSBC." The Company maintains a website at www.citizenssouth.com
that includes information on the Company, along with a list of
products and services, branch locations, current financial
information, and links to the Company's filings with the SEC.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains, and Park Sterling and Citizens South
and their respective management may make, certain statements that
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
can be identified by the fact that they do not relate strictly to
historical or current facts and often use words such as "may,"
"plan," "contemplate," "anticipate," "believe," "intend,"
"continue," expect," "project," "predict," "estimate," "could,"
"should," "would," "will," "goal," "target" and similar
expressions. These forward-looking statements express management's
current expectations or forecasts of future events and, by their
nature, are subject to risks and uncertainties and there are a
number of factors that could cause actual results to differ
materially from those in such statements. Factors that might
cause such a difference include, but are not limited
to: synergies and other financial benefits from the proposed
merger may not be realized within the expected time frames; costs
or difficulties related to integration matters might be greater
than expected; inability to obtain governmental approvals of the
combination on the proposed terms and schedule and the assignment
of certain Citizens South FDIC loss-share agreements; failure of
Park Sterling's or Citizens South's shareholders to approved the
merger; fluctuation in the trading price of Park Sterling's stock
prior to the closing of the proposed merger, which would affect the
total value of the proposed merger transaction; changes in loan
mix, deposit mix, capital and liquidity levels, emerging regulatory
expectations and measures, net interest income, credit trends and
conditions, including loan losses, allowance for loan losses,
charge-offs, delinquency trends and nonperforming asset levels, and
other similar matters with respect to Park Sterling or Citizens
South; the effects of negative economic conditions or a
"double-dip" recession, including stress in the commercial real
estate markets or delay or failure of recovery in the residential
real estate markets; the impact of deterioration of the United
States credit standing, changes in consumer and investor confidence
and the related impact on financial markets and institutions;
changes in interest rates; failure of assumptions underlying the
establishment of allowance for loan losses of Park Sterling
or Citizens South; deterioration in the credit quality of the loan
portfolios of Park Sterling or Citizens South or in the value of
the collateral securing those loans; deterioration in the value of
securities held in the investment securities portfolios of Park
Sterling or Citizens South; legal and regulatory developments;
increased competition from both banks and nonbanks; changes in
accounting standards, rules and interpretations, inaccurate
estimates or assumptions in accounting, including acquisition
accounting fair market value assumptions and accounting for
purchased credit-impaired loans, and the impact on Park Sterling's
or Citizens South's financial statements; and management's ability
to effectively manage credit risk, market risk, operational risk,
legal risk, and regulatory and compliance risk. These
forward-looking statements are not guarantees of future results or
performance and involve certain risks and uncertainties that are
based on management's beliefs and assumptions and on the
information available to Park Sterling or Citizens South at the
time that these disclosures were prepared. Actual outcomes and
results may differ materially from those expressed in, or implied
by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking
statement and should consider all of the following uncertainties
and risks, as well as those more fully discussed in any of Park
Sterling's or Citizens South's filings with the SEC.
Forward-looking statements speak only as of the date they are made,
and Park Sterling and Citizens South undertake no obligation to
update any forward-looking statement to reflect the impact of
circumstances or events that arise after the date the
forward-looking statement was made.
CONTACT: James C. Cherry
Chief Executive Officer
Park Sterling Corporation
704-716-2134
jcherry@parksterlingbank.com
Kim S. Price
Chief Executive Officer
Citizens South Banking Corporation
704-884-2260
kim.price@citizenssouth.com
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