South State Corporation and Southeastern Bank Financial Corporation jointly announced today the signing of a definitive merger agreement. The combination of these two companies creates a premier franchise in the Carolinas and Georgia.

Founded in 1989 and headquartered in Augusta, Georgia, Southeastern is the holding company for Georgia Bank & Trust Company of Augusta and also operates as Southern Bank & Trust in Aiken County, South Carolina. Augusta is the second largest MSA in GA and Georgia Bank & Trust is the largest bank headquartered in the Augusta metro market, where it is ranked second in market share. This opportunity combines two organizations that have a similar culture, offer the same four lines of business and allow for all 12 banking branches to remain open.

“We are pleased to announce this partnership with Georgia Bank & Trust. As the leading bank in the Augusta and Aiken markets, the company has a great reputation and a great team of bankers,” said Robert R. Hill, Jr., CEO of South State Corporation. “Our teams and our company cultures are very similar and we look forward to enhancing customer relationships and continuing the legacy of service in these communities.”

As of March 31, 2016, Southeastern Bank Financial Corporation had approximately $1.9 billion in assets, $1.6 billion in deposits and $1.0 billion in loans. Upon completion of the transaction, the combined company will have approximately $10.5 billion in total assets, $8.7 billion in total deposits, $7.2 billion in total loans and a network of 133 branches in the Carolinas and Georgia.

“We are pleased to be merging with a high-performing regional bank that has similar company values and culture for our employees, customers and shareholders,” said R. Daniel Blanton, CEO of Southeastern Bank Financial Corporation. “We are excited to join with a like-minded regional bank that can build on our success and take it to a higher level for the good of our community and customers. Together, we will strengthen our position as a premier bank in the Southeast.”

The merger agreement has been unanimously approved by the board of directors of each company. Pending regulatory and shareholder approvals, the closing and system conversion is scheduled to occur in the first quarter of 2017. At the closing, Southeastern Bank Financial Corporation will be merged into South State Corporation, and Southeastern’s bank subsidiary, Georgia Bank & Trust Company of Augusta, will be merged into South State’s bank subsidiary, South State Bank.

Under the terms of the agreement, shareholders of Southeastern Bank Financial Corporation will receive 0.7307 shares of SSB common stock for each share of SBFC common stock. The stock issuance is valued at approximately $335 million in the aggregate, based on 6,746,897 shares of SBFC common stock outstanding and on South State’s June 15, 2016 closing stock price of $67.68.

SSB will host a conference call to discuss the transaction at 10:00 a.m. EST on Friday, June 17, 2016. Callers wishing to participate may call toll-free by dialing (877) 506-9272. The number for international participants is (412) 380-2004. The conference ID number is 10087433. To expedite access, please state your name and your company name when you reach an operator. Participants can also listen to the live audio webcast through the Investor Relations section of www.SouthStateBank.com. A replay will be available from 2 p.m. Eastern Time on June 17, 2016 until 9 a.m. on July 1, 2016. To listen to the replay, dial (877) 344-7529 or (412) 317-0088. The passcode is 10087433. The event will also be archived and available beginning June 17 by midnight Eastern Time in the Investor Relations section of www.SouthStateBank.com.

Keefe, Bruyette, & Woods, Inc. served as financial advisor and Wachtell, Lipton, Rosen & Katz provided legal counsel to South State Corporation. Sandler O’Neill + Partners, L.P. served as financial advisor and Bryan Cave LLP served as legal counsel to Southeastern Bank Financial Corporation.