Two banks that are majority-owned by Piedmont Community Bank Holdings in Raleigh, N.C., have agreed to merge.

The $257 million-asset VantageSouth Bank will be merged into the $826 million-asset Crescent State Bank. Piedmont owns 100% of VantageSouth's outstanding common stock and roughly 88% of the common stock for Crescent's parent company, Crescent Financial Bancshares (CRFN).

VantageSouth, of Burlington, N.C., has five branches in North Carolina. Crescent, of Cary, N.C., has 15 branches throughout the state. No closings are expected.

"We believe the proposed merger of Crescent State Bank and VantageSouth Bank will create operating efficiencies for the combined institution and will provide Crescent with new markets, first-class teammates, an established SBA lending program, and many other exciting opportunities," Scott Custer, Crescent Financial's president and chief executive, said in a news release.

Piedmont was formed in 2009 to buy community banks in the Carolinas and Virginia. After it acquired full control of VantageSouth, it merged that bank with Community Bank of Rowan. Piedmont acquired Community in February 2011.

Each outstanding VantageSouth share will be converted at a conditional exchange ratio.

If Crescent Financial's volume-weighted average stock price is at or above $5.25, then the ratio will be 4.8204. If it is at or below $4.75, the ratio will be 5.3278.

If the volume-weighted average stock price is between $4.75 and $5.25, then the ratio will be equal to $25.307 divided by a number equal to the volume-weighted average market price of Crescent Financial's shares during a 30-day trading period that would end four business days before the merger closes.

VantageSouth has roughly 1.4 million outstanding shares of common stock.

Crescent Financial was represented by Bryan Cave. Sandler O'Neill & Partners served as financial advisor and provided a fairness opinion, and Nelson Mullins Riley & Scarborough LLP served as legal advisor to a special committee at Crescent Financial. VantageSouth and Piedmont were represented by Kilpatrick Townsend & Stockton.

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