Dogwood State Bank (OTCPK:DSBX) entered into definitive merger agreement to acquire Community First Bancorporation (OTCPK:CFOK) for $54.7 million on February 1, 2024. Under the agreement, Dogwood State Bank to acquire Community First Bancorporation, and its subsidiary, Community First Bank in an all-stock merger. 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 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, and conduct comprehensive due diligence process. 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. The boards of directors of both businesses have unanimously approved the merger agreement. The transaction is expected to be over 65% accretive to Dogwood?s earnings on a per share basis in 2025. As of February 28, 2024, the parties have filed out application with the FDIC and the state banking commission. Upon completion, CFOK and Community First Bank Inc. will merge with and into DSBX with DSBX as the surviving entity.

Jonathan Doyle, Scott Clark, Alex Bondroff and Tom Sullivan of Piper Sandler & Co. acted as financial advisor and provided a fairness opinion to Dogwood State Bank and Scott Richter, Ben McCall, Lee Lester, Nico Balbontin, Cassidy Galindo, Nona Massengill, Allison Carlon, Conrad Garcia, Anna Derewenda, Philip Delano and Patrick Carr of 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.