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Carolina Trust BancShares to acquire Clover Community Bankshares

Published 18 June 2018

Carolina Trust BancShares, the parent company of Carolina Trust Bank, has agreed to acquire Clover Community Bankshares and its subsidiary bank.

Community Bankshares is the parent company of Clover Community Bank.

Upon completion of the transaction, the combined organization is expected to have approximately $600 million in assets, $450 million in loans, $500 million in deposits and $65 million in shareholders’ equity.

With 11 full-service banking offices and 1 loan production office, including 9 full-service offices in North Carolina (in Lincoln, Rutherford, Iredell, Gaston, and Catawba Counties), 1 loan production office in Salisbury, North Carolina (Rowan County), and 2 branches in South Carolina (York County), the combined organization will be better positioned to serve the businesses and consumers in its markets.

Gwen Thompson, President and CEO of Clover, said this about the opportunity: "We are excited to partner with Carolina Trust and believe this combination is a great opportunity for all Clover Community stakeholders. Our customers will continue to receive the same high quality service and care that has distinguished Clover Community Bank over the years, while benefitting from the increased product and technology offerings of a larger institution.

“Our shareholders will benefit from the increased liquidity of a growing NASDAQ listed company. In Carolina Trust we found a partner who shares our mission of caring for our customers, employees, and community. We are very excited about the future prospects of the combined company.”

According to the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, each share of Clover common stock and preferred stock will be exchanged, at the election of each Clover shareholder, for either 2.7181 shares of Carolina Trust common stock or $22.00 in cash, subject to customary proration procedures that will result in an aggregate 80% stock/20% cash consideration mix.

Carolina Trust anticipates issuing approximately 2.1 million shares of common stock in the merger. Based on Carolina Trust’s 10-day volume weighted average closing price of $8.09 per share as of June 12, 2018, the aggregate deal value is approximately $21.5 million.

Carolina Trust intends to fund the cash portion of the consideration from internal sources. The transaction is expected to be highly accretive to Carolina Trust's earnings, with a tangible book value earnback period of approximately three years.

Two Clover directors will be invited to join the Carolina Trust Bank board of directors at the closing of the merger, and Carolina Trust has agreed to nominate one of the incoming directors for election to the board of directors of Carolina Trust at its next annual meeting of shareholders.

The acquisition is expected to be completed during the fourth quarter of 2018, subject to regulatory approvals, approval by the shareholders of Carolina Trust and Clover, and other customary closing conditions.

In connection with the transaction, Raymond James & Associates, Inc. is acting as financial advisor and has provided a fairness opinion to Carolina Trust, and Wyrick Robbins Yates & Ponton LLP is serving as legal counsel to Carolina Trust.

 FIG Partners, LLC, is acting as financial advisor and has provided a fairness opinion to Clover, and Nelson Mullins Riley & Scarborough LLP is serving as legal counsel to Clover.

Carolina Trust BancShares, Inc. is the registered bank holding company of Carolina Trust Bank. Carolina Trust Bank is a full-service, state-chartered community bank headquartered in Lincolnton, NC operating nine full-service offices and one loan production office. Carolina Trust Bank provides a highly competitive suite of personal and business banking products and services to customers in the Piedmont and Mountain Regions of North Carolina, including the greater Charlotte Metro area. Carolina Trust had $447 million in assets as of March 31, 2018.

Clover Community Bankshares, Inc. is a registered bank holding company headquartered in Clover, SC, and is the parent company for Clover Community Bank. Clover Community Bank is a South Carolina-chartered bank that was formed in 1987 in response to the area’s need for a locally owned and operated community bank.

Clover Community Bank operates two full-service branches in Clover and Lake Wylie, SC. Clover had total assets of $130 million as of March 31, 2018.

Source: Company Press Release