Park Sterling Corp. (PSTB) in Charlotte has agreed to buy Provident Community Bancshares (PCBS) in Rock Hill, S.C.

Park Sterling would pay roughly $6.5 million for Provident — $1.4 million of which would go to Provident shareholders and $5.1 million would go to the Treasury Department to redeem outstanding Provident shares that were issued under the Troubled Asset Relief Program. The deal, announced Wednesday, is expected to close in the second quarter.

Provident lost more than $2.5 million last year, according to Federal Deposit Insurance Corp. data. It has $322.5 million of assets and 11 branches in South Carolina.

The combined company would have $2.3 billion of assets, $1.9 billion of deposits, $1.4 billion of loans and 54 branches in North and South Carolina, Virginia and Georgia.

Park Sterling had doubled its asset size twice in the past three years, acquiring Community Capital Corp. in Greenwood, S.C., and Citizens South Banking Corp. in Gastonia, N.C. The rapidly expanding company also entered the Virginia market in January, moving the headquarters of its mortgage banking and wealth management business to the Greater Richmond region and launching a commercial banking in the area.

The deal with Provident "advances our vision to create a regional community bank in the Carolinas and Virginia and strengthens our leading position in the attractive Charlotte metro market," Park Sterling Chief Executive James Cherry said in a news release. "Additionally, the partnership improves our branch density in South Carolina's Upstate and Midlands regions, provides an attractive source of core deposits to help fund organic loan growth, and creates efficiencies which offer an attractive financial return to shareholders."

Park Sterling's financial advisor was Keefe, Bruyette & Woods. Sandler O'Neill & Partners served as financial advisor to Provident Community. McGuireWoods served as outside legal counsel to Park Sterling, and Kilpatrick Townsend & Stockton acted as outside legal counsel to Provident Community.

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