Community First Bancorporation Announces Definitive Agreement to Acquire SFB Bancorp, Inc.
Tuesday, October 13th, 2020
Community First Bancorporation, Seneca, SC ("Community First") (OTC PINK:CFOK), the parent company of Community First Bank, and SFB Bancorp, Inc., Elizabethton, Tennessee ("SFB") (OTC: SFBK), the parent company of Security Federal Bank, jointly announced on Friday, October 9, 2020 the signing of a definitive agreement for Community First to acquire SFB in a cash transaction. The combined company will have approximately $575 million of assets and 12 offices serving South Carolina, North Carolina and Tennessee. The transaction was unanimously approved by the Board of Directors of each company. It is expected to close in the first quarter of 2021, subject to approvals from federal and state bank regulatory agencies and SFB's shareholders.
SFB's shareholders will receive cash of approximately $8.3 million or $33.00 for each share of common stock held by them. Additionally, immediately prior to the effectiveness of the merger, SFB will pay a special dividend on its outstanding common stock of approximately $2.8 million or $11.00 per share. The merger is expected to be immediately accretive to Community First's earnings per share, excluding transaction costs.
Upon completion of the merger, Community First will establish an East Tennessee Advisory Board composed of the non-employee members of the board of directors of Security Federal Bank who choose to serve on such an Advisory Board.
Richard D. Burleson, President and Chief Executive Officer of Community First, stated: "Community First is excited to enter eastern Tennessee through our acquisition of SFB. This transaction will position us well for future growth in markets in eastern Tennessee and western North Carolina as we bridge our footprint across these portions of these states and South Carolina. We are pleased to partner with Security Federal Bank, a well-run community bank with a great history and deep ties in the communities it serves."
Mr. Burleson continued: "Our motto is ‘We Know What Matters,' and what matters to us is to demonstrate to Security Federal's customers and communities that we will provide them with the same excellent service and relationship banking they have come to expect from Security Federal over its remarkable almost 60-year history. Our goal is to be the bank of choice to our communities by offering first-class, personal and common sense banking products and services."
Mr. Burleson also noted that "Community First looks forward to Security Federal's employees joining with our associates and to providing those new colleagues with the resources, products and services needed to make them successful."
SFB Chairman, President and Chief Executive Officer Bill Hampton stated: "We are delighted to provide our customers, shareholders and employees with the opportunity to partner with Community First. Our merger with Community First will provide our customers with access to expanded product offerings and services and also deliver value for our shareholders. Also, the establishment of the East Tennessee Advisory Board consisting of our Directors will allow us to stay connected to our customers and continue to be involved in our community."
Community First was advised by D.A. Davidson & Co. as financial advisor and Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, as legal counsel. Janney Montgomery Scott LLC served as SFB's financial advisor and Jones Walker LLP, Washington, DC served as SFB's legal counsel.