Shawshank, VA 5/14/12 (StreetBeat) -- Park Sterling Corp. plans to acquire Gastonia-based Citizens South Bank (Nasdaq: CSBC) in a cash-and-stock deal valued at $77.8 million.Park Sterling Corp. is the parent of Park Sterling Bank of Charlotte. The deal will marry the two largest community lenders in the Charlotte metro market, creating a $2.2 billion community bank franchise in Charlotte with a presence extending from the north Georgia mountains to Wilmington and Charleston, S.C.
After swallowing Citizens South, Park Sterling will have more than 40 retail branches in the Carolinas and northeast Georgia, in addition to commercial lending, mortgage and wealth-management units.
“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,” Jim Cherry, Park Sterling chief executive, said in a statement Monday morning. “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.”
The deal is expected to close in the fourth quarter, pending regulatory approvals. The proposal calls for Park Sterling to pay 30 percent of the acquisition in cash and 70 percent in stock.
Plans call for Citizens South CEO Kim Price to become vice chairman of Park Sterling’s board and will have a consulting role with the combined bank. Citizens South board member Ben Rudisill II also will join Park Sterling’s board of directors.
Speculation that Park Sterling would soon make a move on an acquisition has increased in recent weeks, following reports that Charlotte-based First Trust Bank had attracted some suitors. Some industry insiders said Park Sterling was among the banks kicking tires. And on May 1, Cherry told investors that merger-related talks in the bank’s pipeline had gained momentum.
But prospects of a Park Sterling-Citizens South deal had flown under the radar as officials kept the talks quiet.
“We remain active in seeking attractive partners who share our vision of creating a profitable, growing regional franchise, characterized by sound risk management, superior customer service and exceptional customer relationships,” Cherry said at the end of the first quarter.
Park Sterling was founded in 2006. The bank overhauled its management team in 2010 and raised $150 million in new capital via the sale of common stock. It announced plans to aggressively expand into new markets in the Carolinas and Virginia. Last year, it acquired Greenwood, S.C.-based Community Capital Corp., a community lender in Upstate South Carolina. The bank also has opened offices in Charleston, S.C., and Raleigh.
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