Southern BancShares in Mount Olive, N.C., is buying a smaller in-state bank.

Southern has agreed to acquire Heritage BancShares in Lucama, N.C., for nearly $4 million in cash and stock, the companies announced Friday. The deal is expected to be completed in the second quarter.

The combined company would have $2.3 billion of assets and 77 branches. Southern is the holding company of the Southern Bank and Trust, which has $2 billion of assets and 65 offices in north Carolina and Virginia. Heritage BancShares is the parent company of The Heritage Bank, with $272 million of assets and 12 branches, all in North Carolina.

Heritage stockholders would be able to exchange their equity for Southern shares or for cash. Southern will pay $125 a share for Heritage’s common stock and $25 a share for the company’s preferred stock.

“This represented an excellent opportunity for us to increase our presence and market share in these areas, as Southern Bank currently operates offices in several neighboring communities within the region,” J. Grey Morgan, Southern's chairman and chief executive, said in a news release.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.