LEXINGTON, S.C., AUGUSTA, Ga. and AIKEN, S.C., Aug. 14, 2013 /PRNewswire/ -- First Community Corporation (Nasdaq: FCCO), the holding company of First Community Bank, and Savannah River Financial Corporation (SRFC), the holding company of Savannah River Banking Company, jointly announced today the signing of a definitive merger agreement, under which First Community has agreed to acquire Savannah River in a cash and stock transaction with a total current value of approximately $33.6 million or approximately $11.00 per share. The transaction value at the time of the merger may change due to changes in the price of First Community stock.
Upon completion of the transaction, the combined company will have approximately $775 million in total assets, $635 million in total deposits, and $450 million in total loans. The transaction will create a 13-office banking company. The merger agreement has been unanimously approved by the Board of Directors of each company. Closing of the transaction, which is expected to occur early in the first quarter of 2014, is subject to customary conditions, including regulatory approval and approval by the shareholders of both companies.
"This is a comfortable extension of our company into a contiguous county, and beyond into Augusta. The Central Savannah River Area (CSRA) and the midlands of South Carolina have many economic similarities, and both are experiencing nice momentum in business growth," said First Community President and CEO Michael C. "Mike" Crapps. "More importantly, we are excited to partner with the Savannah River Banking Company team. The Board of Directors, CEO Randy Potter, President Jeff Spears, and the entire team have created a successful banking organization, with a commitment to quality that permeates all aspects of their business. This includes the talent of the staff, their approach to serving their clients, and is evident in the quality of their balance sheet."Per the merger agreement, 60% of the consideration will be paid in cash and the balance (40%) will be in newly issued shares of FCCO common stock. The exchange ratio for the stock component of the transaction will be determined by dividing $11.00 by First Community's weighted average stock price during a ten trading day period ending five business days before the closing of the transaction (the "FCCO stock price"), if the FCCO stock price is above $8.48 but below $10.36. If the FCCO stock price is at or above $10.36, then the exchange ratio will be 1.0618 FCCO shares for each SRFC share, and if the FCCO stock price is at or below $8.48, then the exchange ratio will be 1.2972 FCCO shares for each SRFC share. The merger agreement provides FCCO and SRFC with certain termination and exchange ratio adjustment rights if the FCCO stock price is above $11.78 or below $7.54. Mr. Paul S. Simon, Chairman of the Board of SRFC, said, "The Board of Directors of the Savannah River Financial Corporation, its Executive Officers, and I are pleased to recommend this merger opportunity to our shareholders and to join together with an excellent company that is well capitalized and has much forward momentum. This combination offers our shareholders a cash dividend and enhanced liquidity, as well as a premium on the capital they invested. We are excited about the future of this combined company." Randy Potter, CEO of SRFC, along with Paul S. Simon and Leland Reynolds, all current Savannah River Board members, will be appointed as members of the First Community Board of Directors. Additionally, Mr. Potter will serve the combined company in a consulting role for a one year period. Jeff Spears, President of SRFC, will remain as the Regional President of the CSRA market, along with Phil Wahl, Augusta Market President, and Joe Lewis as Aiken Market President. Mr. Spears commented, "Our clients will continue to receive the same high quality level of service from the same bankers that have served them at SRFC. With First Community, we have found a shared passion for our work with local businesses and professionals. This focus will continue and we are looking forward to the additional capacity and product lines that this combination of banks will bring to our clients."