Dogwood State Bank (OTC: DSBX) and Community First Bancorporation (OTC: CFOK) jointly announce the signing of a definitive merger agreement for Dogwood State Bank to acquire Community First Bancorporation, and its subsidiary, Community First Bank in an all-stock merger.  The strategically compelling combination enhances Dogwood’s liquidity and funding while solidifying its position in high growth markets.

The merger agreement provides that each Community First Bancorporation common shareholder receive 0.5875 shares and each preferred shareholder will receive 64.7719 shares of Dogwood’s voting common stock. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Community First Bancorporation stockholders. Based on Dogwood’s most recent capital raise of $16.4 million in March 2023 at $20.00 per share, this would imply a transaction value per share of $11.75 for each Community First Bancorporation

common share.

“The partnership with Community First Bancorporation unlocks long-term growth potential for shareholders and access to significant scale in the Upstate of South Carolina,” said Steve Jones, President and Chief Executive Officer of Dogwood State Bank in a press release. “With this transaction, we will have a meaningful presence in the largest major growth markets in the Carolinas.”

The pro forma company will have total assets of $2.2 billion, total deposits of $1.8 billion and net loans of $1.7 billion. The transaction is expected to be over 65 percent accretive to Dogwood’s earnings on a per share basis in 2025. The initial tangible book value dilution, driven primarily by the current interest rate environment, is anticipated to be earned-back in approximately one year.

“From the beginning, Community First Bank has been focused on developing a business model that focuses on safe and sound relationship banking in the markets we serve. We believe we have been very successful with this in our Tennessee, North Carolina and South Carolina markets, which encompass some of the fastest growing markets in the nation.” said Richard D. Burleson, President and Chief Executive Officer of Community First Bancorporation and Community First Bank in a press release.

Mr. Burleson continued in the release stating , “However, to continue growing, to provide cutting edge technology and to become more profitable, we need a partner who can provide us the opportunity to better serve our customers with a much larger balance sheet, enhanced technology and expanded products and services. We believe our partnership with the Dogwood team provides just that, and I believe the synergies that exist between our companies will result in tremendous success for both sides.”

The boards of directors of both businesses have unanimously approved the merger agreement. The transaction is anticipated to close in the second half of 2024, subject to customary closing requirements, including Community First shareholder, Dogwood shareholder and regulatory approvals. Following the closing, two directors of Community First Bancorporation will join the Dogwood Board of Directors. Additionally, Dogwood will create an advisory board for the Upstate consisting of members of the Community First Bancorporation Board of Directors.

Piper Sandler & Co. acted as financial advisor and provided a fairness opinion to Dogwood State Bank and Williams Mullen served as Dogwood State Bank’s legal advisor.

D.A. Davidson & Co. acted as financial advisor and provided a fairness opinion to Community First Bancorporation and Brooks Pierce LLP served as Community First Bancorporation’s legal advisor.