Announcement • Jan 07

SouthPoint Bancshares, Inc. (OTCPK:SOUB) acquired Merchants Financial Services, Inc.

SouthPoint Bancshares, Inc. (OTCPK:SOUB) entered into a definitive agreement to acquire Merchants Financial Services, Inc. on August 25, 2021. 50% of the aggregate consideration will be paid in cash and the remaining 50% will be exchanged for shares of SouthPoint common stock. The consideration per share of Merchant’s stock will be $30.00 cash or 1.1538 SouthPoint shares, or a combination of a portion of each. Merchants Bank of Alabama, subsidiary of Merchants Financial Services will continue to operate under its current name as a division of SouthPoint Bank after completion of the merger. Merchants Financial Services President, Chief Executive Officer and Senior Lender Charles R. NeSmith will become President of North Alabama for SouthPoint and likewise, Executive Vice President and Chief Financial Officer W. Clark Rainwater will become Chief Financial Officer of the combined organization. Additionally, three directors from Merchants Financial Services will join the Board(s) of Directors of SouthPoint and SouthPoint Bank. The merger has been unanimously approved by the Board of Directors of each company. The transaction remains subject to approval by both companies’ shareholders and federal and state regulatory authorities as well as the satisfaction of other customary closing conditions provided in the merger agreement. The transaction is expected to close early in the first quarter of 2022. For SouthPoint, the merger is expected to be accretive to 2022 earnings per share with a tangible book value earnback period of less than three years. Compton Jones Dresher served as legal advisor to SouthPoint and Performance Trust Capital Partners, LLC served as exclusive financial advisor. Gerrish Smith Tuck served as legal and financial advisor to Merchants and Vining Sparks rendered a fairness opinion to Merchants. SouthPoint Bancshares, Inc. (OTCPK:SOUB) completed the acquisition of Merchants Financial Services, Inc. on January 6, 2022.

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