8-K: Southern States Bancshares Finalizes Acquisition of CBB Bancorp, Expanding Georgia Presence

Southern States Bancshares has completed its acquisition of CBB Bancorp, enhancing its footprint in the Atlanta metro area and solidifying its position as a premier Southeastern community bank.

Summary

• Southern States Bancshares completed its acquisition of CBB Bancorp on July 31, 2024.
• CBB Bancorp merged into Southern States Bancshares, and Century Bank merged into Southern States Bank.
• The acquisition expands Southern States' presence in Georgia, particularly in the Atlanta metro market.
• Former CBB Bancorp shareholders can elect to receive either 1.550 shares of Southern States common stock or $45.63 in cash per share, subject to a 10% proration limit for cash elections.
• All CBB Bancorp stock options were cancelled and converted into cash payments based on the difference between $45.63 and the option's exercise price.
• Richard E. Drews, Jr., former CEO of CBB Bancorp and Century Bank, has been appointed to the Board of Directors of Southern States Bancshares and Southern States Bank.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the successful completion of a strategic acquisition, which is expected to enhance the company's market position and financial performance. The inclusion of a seasoned executive on the board further boosts confidence.

Positives

• The acquisition enhances Southern States' presence in the high-growth Atlanta metro market.
• Southern States Bank now has a larger network of 15 full-service branches and two loan production offices.
• The merger brings a solid core deposit base and strong liquidity position from Century Bank.
• Richard E. Drews, Jr., a seasoned banking executive, joins the board of directors.
• The acquisition is expected to deliver an increased level of products and services to the communities served.

Negatives

• Cash elections for CBB Bancorp shareholders are subject to proration, with a maximum of 10% of shares receiving cash.
• The integration of the two companies may present challenges.
• There is a risk that cost savings and synergies may not be fully realized or may take longer than expected.

Risks

• Potential legal proceedings related to the merger could arise.
• The integration of Southern States and CBB Bancorp's businesses may not be successful.
• Cost savings and synergies from the merger may not be fully realized or may take longer than expected.
• The merger could disrupt relationships with employees, customers, or other business partners.
• Management's time may be diverted to merger-related issues.
• The issuance of Southern States common stock in the merger could have a dilutive effect.
• The reaction of customers, employees, and counterparties to the merger is uncertain.

Future Outlook

The company expects the merger to positively impact the combined entities' operations, financial condition, and financial results, and anticipates realizing other benefits from the merger. However, these statements are forward-looking and subject to risks and uncertainties.

Management Comments

• We are excited to welcome aboard Century Banks proven leadership and talented team of associates, said Southern States President and CEO Mark A. Chambers.
• Century Bank has a solid core deposit base and strong liquidity position, and we look forward to delivering an increased level of products and services to the communities we serve together.

Industry Context

This acquisition reflects a trend of consolidation within the community banking sector, where smaller banks merge to gain scale, expand market reach, and improve operational efficiencies. The move allows Southern States to compete more effectively in the competitive Southeastern banking landscape.

Comparison to Industry Standards

• The acquisition of CBB Bancorp by Southern States Bancshares is similar to other regional bank mergers aimed at increasing market share and operational scale.
• For example, other recent mergers in the Southeast region include the acquisition of smaller community banks by larger regional players, such as the merger of First Horizon and IBERIABANK.
• The 1.550 share or $45.63 cash consideration per share is within the typical range for such acquisitions, although the 10% proration limit on cash elections is a common mechanism to manage the cash outflow.
• The appointment of Richard E. Drews, Jr. to the board is a common practice in acquisitions, where key management from the acquired company are retained to ensure a smooth transition and retain institutional knowledge.

Management Changes

Stakeholder Impact

• Shareholders of CBB Bancorp have the option to receive cash or stock in Southern States Bancshares.
• Employees of both Southern States and Century Bank will be integrated into the combined entity.
• Customers of both banks will have access to a broader range of products and services.
• The merger is expected to benefit the communities served by the combined bank through increased services.

Next Steps

• Southern States will mail an Election Form and Letter of Transmittal to former CBB Bancorp shareholders.
• The integration of the two companies' operations will commence.
• Richard E. Drews, Jr. will stand for re-election at the next annual meeting of stockholders.

Key Dates

Keywords

acquisition, merger, bank, Southern States Bancshares, CBB Bancorp, Century Bank, Georgia, Atlanta, community bank, banking