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Carolina First Corporation
P.O. Box 1029
Greenville, SC 29602
864/255-4919
NEWS RELEASE
DATE: January 10, 2000
RELEASE DATE: Immediate
ANCHOR FINANCIAL TO MERGE WITH CAROLINA FIRST/ IN-MARKET
TRANSACTION CREATES 4TH LARGEST SOUTH CAROLINA FRANCHISE
GREENVILLE, SC - Carolina First Corporation (Nasdaq/NM:CAFC) and Anchor
Financial Corporation (Nasdaq/NM:AFSC) today announced the signing of a
definitive agreement under which Anchor Financial, a $1.2 billion institution
headquartered in Myrtle Beach, South Carolina, will merge with Carolina First.
Based on Friday's closing stock price, the stock-for-stock merger is valued at
approximately $300 million.
The resulting holding company, which will be called The South Financial Group,
will have approximately $4.4 billion in assets and 108 branch offices in South
Carolina, Florida, and North Carolina. Following the merger, Carolina First Bank
(when combined with The Anchor Bank) will have a top 5 market share rank in the
four leading metropolitan areas of South Carolina. It will also have the fourth
largest deposit market share in South Carolina. The pro forma market
capitalization of the combined company is expected to be approximately $715
million, or 82nd among all U.S. banks.
The merger agreement provides that Anchor shareholders will receive 2.1750
shares of Carolina First common stock for each Anchor share. Based on Carolina
First's January 7th closing market price of $16.50, the exchange ratio
represents a
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price of $35.89 for each Anchor share. Carolina First will record the
acquisition, which is expected to close in the second quarter of 2000, using the
pooling-of- interests method of accounting. The transaction is subject to
customary regulatory approvals and the shareholder approval of both companies.
"This combination brings together two companies with complementary strategies,
customers, and delivery channels," said Mack I. Whittle, Jr., President and
Chief Executive Officer of Carolina First Corporation. "Our combined company
will be a dominant independent financial services company in South Carolina. The
merger will create the second largest bank in the history of South Carolina-the
largest bank since South Carolina National, which was acquired in the early
1990s. In addition, we will have a strong market presence in the most attractive
markets in the state. This is a logical expansion for Carolina First, adding
in-market share and extending our presence into new coastal markets. Anchor is
an exceptionally well- run organization that fits with our super community
banking philosophy. This is an exciting event in the history of Carolina First."
Whittle will serve as the President and Chief Executive Officer of the combined
organization. Anchor's Chairman, President, and Chief Executive Officer, Stephen
L. Chryst, will serve as Chairman and Chief Operating Officer of Carolina First
Bank, the banking subsidiary for the Carolinas. The holding company board will
include 5 new directors from Anchor.
"We are very pleased with what this merger means for our shareholders,
customers, and community, " said Stephen L. Chryst, Chairman, President, and
Chief Executive Officer of Anchor Financial. "We look forward to being an
integral part of South Carolina's premier independent banking company. Our
shareholders will own approximately 41% of the combined company, which is
committed to serving the Carolinas and the region. We share Carolina First's
focus on flexible, personalized customer service. Continuing to deliver this
service will be our first priority as we combine our organizations."
Carolina First estimates cost savings opportunities, excluding savings from
eliminating overlapping branch operations, to equal 35% of Anchor's 1999
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annualized operating expenses, or approximately $13.8 million pre-tax. Carolina
First expects the merger to be approximately 3% accretive to earnings per share
in 2001. The transaction is projected to be approximately 8% dilutive to
Carolina First's earnings per share in 2000, assuming only 30% of the estimated
cost savings are realized in 2000. One-time, merger-related charges of
approximately $20 million pre-tax are anticipated.
The holding company will be named The South Financial Group (assuming approval
by Carolina First shareholders) and will remain headquartered in Greenville,
South Carolina. The subsidiary bank names will be Carolina First Bank for the
Carolinas, Citrus Bank for Florida, and Bank CaroLine for Internet banking.
Following the expected September 2000 conversion to Carolina First Bank's
systems, The Anchor Bank, Anchor Financial's principal subsidiary bank, will
operate as Carolina First Bank.
Whittle added, "Our new holding company name, The South Financial Group, is
designed to reflect our focus on the most attractive markets in one of the
fastest growing areas of the country. Our new name also emphasizes a broad and
evolving array of financial services and delivery alternatives. It means
customer options, customer choice, and customer service. Our merger with Anchor
fits well with this regional, more far-sighted vision for a dynamic super
community banking organization."
Carolina First Corporation, headquartered in Greenville, South Carolina, is a
financial services company with $3.2 billion in total assets, 62 branch offices
in South Carolina and 13 branch offices in northern and central Florida. It
operates Carolina First Bank, the largest South Carolina-based commercial bank;
Citrus Bank, a Florida banking subsidiary; Carolina First Mortgage Company, the
second largest mortgage loan servicer in South Carolina; and Carolina First
Bank, F.S.B., a savings bank which offers Bank CaroLine (an Internet bank).
Other subsidiaries include a full service brokerage company, an automobile
finance company and a small business investment company that invests principally
in bank technology companies. Carolina First's common stock trades on the Nasdaq
National Market under the symbol CAFC. Carolina First's press releases are
available by telefax at
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no charge by calling PR Newswire's Company News On-Call at 800-758-5804,
extension 144553. Press releases along with additional information may also be
found at Carolina First's web site: http://www.carolinafirst.com.
Anchor Financial Corporation, with assets of $1.2 billion, is the parent of The
Anchor Bank. Anchor's common stock trades on the Nasdaq National Market under
the symbol AFSC. Anchor Financial Corporation's web site at
http://www.anchorfinancialcorp.com provides additional information about the
company.
Carolina First and Anchor Financial will conduct a conference call today at 2:00
p.m. (ET) to discuss the transaction. To participate, please call
1-800-967-7135, access code #872324 for domestic callers and 1-719-457-2626,
access code #872324 for international callers. A 48-hour rebroadcast of the call
will be available beginning at approximately 3:45 p.m. (ET). Access to the
rebroadcast is available via 1-888-203-1112, access code #872324 for domestic
callers and 1- 719-457-0820, access code #872324 for international callers.
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Carolina First Corporation
Merger With Anchor Financial Corporation
Transaction Summary
Announcement: January 10, 2000
Transaction Terms:
Structure
- Tax-free exchange of stock
- Pooling-of-interests method of accounting
- Definitive agreement signed
- Due diligence completed
Terms
- Fixed exchange ratio at 2.1750 Carolina First
shares for each Anchor share
- 19.9% lock-up option
Timing
- Targeted to close second quarter 2000
- Subject to customary regulatory and shareholder
(Carolina First and Anchor) approvals
Pricing Overview:
Indicated price per share (1/7/00) $35.89
Indicated total purchase price $300 million
(based on diluted shares outstanding)
Price to normalized trailing 4Q earnings 19.6x
Price to 2000 EPS consensus analyst estimates 18.9
Price to 9/30/99 diluted book value 3.22x
Premium to Anchor market price 37%
Premium to deposits 22%
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Certain matters set forth in this news release may contain forward-looking
statements that are provided to assist in the understanding of anticipated
future financial performance. However, such performance involves risks and
uncertainties that may cause actual results to differ materially from those in
such statements. For a discussion of certain factors that may cause such
forward-looking statements to differ materially from the Company's actual
results, see the Company's Annual Report on Form 10-Q for the quarter ended
September 30, 1999.
CONTACTS:
Carolina First Corporation:
William S. Hummers III, Executive Vice President, (864) 255-7913
Mary M. Gentry, Treasurer, (864) 255-4919
Anchor Financial Corporation:
Tommy E. Looper, Executive Vice President and Chief Financial Officer,
(843) 946-3164
Barbara Marshall, Marketing and Corporate Communications,
(843) 946-3126
***END***
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