Heritage Bancorp. Inc.

The Heritage Bank
Location: Hinesville, Georgia

Heritage Southeast Bancorporation Acquires Heritage Bancorp

CCF Holding Company (OTCQX: CCFH) (“CCF”), Heritage Bancorporation, Inc. (“HBI”) and Providence Bank (“Providence”) jointly announced today the signing of a definitive agreement pursuant to which HBI will merge with and into CCF and a wholly-owned subsidiary of CCF will merge with and into Providence in an all-stock transaction. Following the closing of this transaction, Providence and the subsidiary banks of each of CCF and HBI will each be a wholly-owned subsidiary of CCF. The banks will maintain their existing names, executive management teams and boards of directors. This combination of three community banks under one holding company will create a growth-oriented banking franchise, with branches in Georgia and northeast Florida. As of September 30, 2018 and excluding purchase accounting, the consolidated holding company has pro forma total assets of approximately $1.1 billion, gross loans of approximately $793 million, and deposits of approximately $978 million.

Upon completion of the transaction, Leonard A. Moreland, President and Chief Executive Officer of CCF, will continue as the Chief Executive Officer of the surviving holding company, which plans to change its name to Heritage Southeast Bancorporation, Inc. (“HSBI”). Brian Smith will serve as President and Chief Operating Officer of HSBI, and Brad Serff will serve as Executive Vice President of HSBI. Following the completion of the transaction, the board of directors of HSBI will consist of Kenneth R. Lehman, who is anticipated to serve as chairman, two individuals designated by each of CCF, HBI and Providence, and two additional independent directors, one of whom is anticipated to be John Presley.

“We are very excited about the proposed business combination and the opportunities this combination will create for our companies,” said Moreland. “This partnership not only creates a dynamic and diverse banking franchise to better serve the needs of our customers, but it also creates value and optionality for our shareholders.”

“The combination of these three banks under a single holding company will create a banking franchise with the scale, diversity of product offerings and market presence to expand into new markets and customer segments,” noted Brian Smith, President and Chief Executive Officer of HBI. “Together we will realize benefits it would have taken us years to accomplish independently.”

“The combined entity will offer diverse business lines, product offerings, market dynamics and complementary balance sheets with a shared ‘customer first’ corporate culture,” said Brad Serff, President and Chief Executive Officer of Providence.

Subject to the terms of the business combination agreement, HBI shareholders will receive 0.9504 shares of CCF common stock for each outstanding share of HBI common stock and Providence shareholders will receive 0.1225 shares of CCF common stock for each outstanding share of Providence common stock. Each outstanding option to purchase shares of HBI common stock or Providence common stock will be assumed by CCF and become an option to purchase shares of CCF common stock, with the exercise price and number of shares underlying the option adjusted to reflect the respective exchange ratios. Based on CCF’s closing stock price of $25.51 as of December 19, 2018, this equates to a per share value of $24.24 for HBI shareholders and $3.12 for Providence shareholders and an aggregate transaction value of approximately $105 million. Based on the exchange ratios above, the current equityholders of CCF will own approximately 44% of the consolidated entity, and the current shareholders of HBI and Providence will own approximately 49% and 7%, respectively.

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