Southern BancShares NC Inc. (OTCPK:SBNC) signed a definitive merger agreement to acquire Heritage Bancshares, Inc. for $17 million on February 15, 2013. Pursuant to terms of the merger agreement, each outstanding share of Heritage common stock will be cancelled at closing and converted into the right to receive either an amount equal to $125 in cash or 0.1010 shares of Southern common stock and each outstanding share of Heritage Series A preferred stock, will be cancelled at closing and converted into the right to receive either an amount equal to $25 in cash or one share of a newly created series of Southern preferred stock. Subject to certain allocation provisions set forth in the merger agreement, the aggregate amount of cash that will be paid in the merger in exchange for Heritage common stock and Heritage preferred stock will not exceed $3.5 million and $0.4 million respectively, provided that each such amount may be increased by Southern, in its sole discretion, in certain circumstances.

The merger agreement is subject to customary closing conditions, including without limitation, regulatory and Heritage shareholder approval, and the transaction is scheduled for completion in the second quarter of 2013.

As of May 17, 2013, North Carolina Banking Commission approved the transaction.

Sandler O'Neill + Partners, L.P. acted as the financial advisor and fairness opinion provider for the special committee of Heritage Bancshares, Inc. Gaeta & Eveson PA acted as the legal advisor for Heritage Bancshares. Raymond James & Associates Inc. acted as the financial advisor and Smith Anderson Blount Dorsett Mitchell & Jernigan LLP acted as the legal advisor for Southern BancShares.