Description of Consideration
Southern Community Financial Corporation, the holding company for Southern Community Bank and Trust, has acquired The Community Bank for approximately $87 million in cash and common stock. The Community Bank, founded in 1987 and headquartered in Pilot Mountain, North Carolina, operates 10 community banking offices throughout Surry, Rockingham, Stokes, Iredell and Yadkin counties, North Carolina. Under the terms of the agreement, stockholders of The Community Bank will be entitled to receive cash, shares of Southern Community common stock, or a combination of cash and shares subject to election and allocation procedures which are intended to ensure that, in aggregate, approximately 20% of the total consideration will be cash and 80% will be common stock. The combination will greatly enhance Southern Community's deposit market share in the Piedmont Triad region, which is part of the largest MSA in North Carolina. This transaction will give Southern Community a #3 market share position in Stokes County with approximately 18% of the market and a #5 market share position in Surry County with 10.1% total market share in addition to its existing #5 position in Forsyth County. The transaction is expected to be accretive to earnings in the first year based on easily achievable and very conservative cost savings assumptions. The Community Bank presently operates banking offices serving markets in Pilot Mountain, Mount Airy, Sandy Ridge, Madison, Union Grove, Dobson, King, Walnut Grove and Jonesville, North Carolina.
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