ASHEBORO, N.C. -- First Southern Bancorp Inc. has signed a letter of intent to buy Perpetual Savings Bank.

The companies said the letter of intent provides for the conversion of Perpetual Savings to a state-chartered capital stock savings bank from a state chartered mutual savings bank. It also provides for the simultaneous acquisition of Perpetual Savings by First Southern.

In addition, the companies said that First Southern common shares would be offered in a subscription offering at a 15% discount to the then-market price, subject to certain conditions, to Perpetual Savings Bank's eligible account holders, and in a community offering, at a 5% discount to the then-market price.

The companies said the number of shares to be offered in the subscription and community offerings will be determined by dividing the pro forma market value of Perpetual Savings Bank, as determined by an independent appraiser, by the market price of First Southern common stock.

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