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First Reliance Bancshares Closes Acquisition of South Carolina's Independence Bancshares.

M2 EQUITYBITES-January 23, 2018-First Reliance Bancshares Closes Acquisition of South Carolina's Independence Bancshares

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23 January 2018 - South Carolina, US-based bank holding company First Reliance Bancshares, Inc. (OTC: FSRL) has closed its merger with South Carolina, US-based Independence Bancshares, Inc., the companies said.

Last September, First Reliance Bancshares entered into a definitive agreement to acquire South Carolina, US-based Independence Bancshares, Inc. and its wholly-owned bank subsidiary, Independence National Bank, of Greenville.

Independence Bancshares has approximately USD 90m in assets and USD 76.1m in deposits.

Concurrent with the announcement of its entry into a definitive agreement to acquire IEBS, the company also announced the closing of a private placement of common and non-voting preferred stock to various investors from which it received gross proceeds of USD 25.1m.

Under the terms of the merger agreement, Independence shareholders will receive merger consideration in cash, for each share of IEBS.

The transaction is valued at approximately USD 11m based on a purchase price of USD 0.125 for each outstanding common share of IEBS, and includes the redemption of USD 8.425 m of Independence's convertible preferred stock at the redemption price of USD 1,000 per share.

The company expects to recover Independence's deferred tax assets and other related tax benefits totaling approximately USD1.9m.

First Reliance said the transaction is expected to be slightly dilutive to the company's 2018 tangible book value per share, including one-time transaction costs, and double-digit accretive to First Reliance's fully diluted earnings per share for 2018.

Once combined, the company is expected to have approximately USD 532.9m in assets, USD 369.3m in gross loans, USD 432.4m in deposits, 11 banking offices in South Carolina, and plans to open a loan production office in Winston Salem, North Carolina in October.

The boards of directors of both companies, after extensive review and due diligence, have approved the merger transaction.

This acquisition is expected to close early in 1Q18, subject to standard regulatory approvals, shareholder approvals from IEBS, as well as other customary conditions.

First Reliance Bancshares, Inc. is the holding company for First Reliance Bank. The Bank was founded in 1999, employs approximately 141 associates and serves the Columbia, Lexington, Charleston, Mount Pleasant, Summerville, Loris, North Myrtle Beach, and Florence markets in South Carolina.

Hovde Group, LLC acted as lead financial advisor to the company in its acquisition of Independence with Michael P. Corso serving as lead banker, and Haynsworth Sinkler Boyd, P.A. acted as legal counsel to the company.

FIG Partners, LLC served as Independence's financial advisor and Nelson Mullins Riley and Scarborough, LLP served as its legal advisor.

Hovde Group, LLC, also acted as the company's sole placement agent in connection with its private placement capital offering and Nelson Mullins Riley and Scarborough, LLP acted as the company's legal counsel for the offering.

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Publication:M2 EquityBites (EQB)
Geographic Code:1U5SC
Date:Jan 23, 2018
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