US-based SouthPoint Bancshares and Merchants Financial Services have announced a stock and cash merger agreement.

The aggregate value of the deal has not been made public.

Under the agreement, 50% of aggregate consideration will be paid in cash and the remaining will be exchanged for shares of SouthPoint Bancshares’ common stock.

For each share of Merchants Financial Services’ stock $30 cash or 1.1538 SouthPoint Bancshares’ shares, or a combination of a portion of both will be offered.

As per the financials on 30 June 2021, the merged entity is expected to have approximately $1bn in assets, $895m in deposits, and 10 branches.

Upon the completion of the deal, Merchants Financial Services’ Merchants Bank of Alabama will continue to operate under its name as a unit of SouthPoint Bancshares’ SouthPoint Bank.

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Additionally, Merchants Financial Services president, CEO and senior lender Charles NeSmith will take charge as president of North Alabama for SouthPoint Bancshares and EVP and CFO W. Clark Rainwater will become CFO of the combined firm.

SouthPoint chairman, president and CEO J. Stephen Smith said: “We are extremely excited to join with the Merchants Bank team and serve their markets in Cullman and Marshall counties. We look forward to a bright future together.”

Merchants Financial Services chairman Steven Glasscock said: “Merchants Bank of Alabama is proud to partner with SouthPoint Bank in this transaction and looks forward to the continued community bank benefits the combined organizations will bring to our customers, employees, stockholders and communities.”

The merger is expected to close in the first quarter of 2022. However, it is subject to regulatory approval and other closing conditions.