Piedmont Financial Holding Company and Wake Forest Bancshares, Inc. Announce Combination of Two 100+ Year Old North Carolina Banking Institutions

WINSTON-SALEM, N.C. and WAKE FOREST, N.C., June 27, 2023 (GLOBE NEWSWIRE) — Piedmont Financial Holding Company, the parent company of Piedmont Federal Savings Bank (“Piedmont Federal”), has announced an agreement to acquire Wake Forest Bancshares, Inc. (OTC Pink: WAKE), the parent company of Wake Forest Federal Savings and Loan Association (“Wake Forest Federal”).

Piedmont Federal was chartered in 1903 and serves clients in markets ranging from the Northwest Piedmont to the Triad and Lake Norman. Its merger with Wake Forest Federal, founded in 1922, will extend its deposit client base to include Wake Forest Federal’s office located in the heart of Wake Forest, NC.

Per the terms of the transaction, minority shareholders of Wake Forest Bancshares will receive $34.34 in cash for each publicly owned share. Based on 435,296 publicly held shares, the aggregate cash payment equals approximately $14.95 million. The transaction has an implied aggregate deal value of $36.75 million based on a total of 1,070,296 shares outstanding, which includes 635,000 shares of Wake Forest Bancshares owned by Wake Forest Bancorp, M.H.C that will be cancelled concurrently with the transaction. Wake Forest Federal will be merged into Piedmont Federal, while Wake Forest Bancshares and Wake Forest Bancorp, M.H.C. will each be merged into Piedmont Financial Holding Company. Wake Forest Federal’s branch office will continue to operate as “Wake Forest Federal, a division of Piedmont Federal,” for the foreseeable future.

Wake Forest Federal members will receive mutual rights in Piedmont Federal, which is 100% mutually owned by its members. In addition, upon completion of the merger, Piedmont Federal will establish a $500,000 foundation to benefit the community of Wake Forest. It is believed that this would be the largest privately sourced community foundation in the Wake Forest area. The current members of the Wake Forest Federal Board will initially serve on the Board of Trustees of the foundation, as will one independent member who will be appointed by Piedmont Federal in consultation with Wake Forest Federal.

“This combination brings together two like-minded, historic banking institutions into a stronger franchise that will benefit all of our clients and communities,” said David P. Barksdale, President and CEO of Piedmont Federal. “We at Piedmont Federal have admired the job that Renee Shaw and her team have done to serve their members over the years, and look forward to continuing that tradition together as partners.”

He continued: “This is the first step in a broader strategy to extend our member banking experience to the greater Triangle market.”

Renee Shaw, President and CEO, and all other current employees of Wake Forest Federal are expected to remain with the combined company after the transaction closes. One director from Wake Forest Federal will join Piedmont Federal’s board and the remaining directors will be invited to join a local advisory board.

Regarding the merger, Renee Shaw stated, “Piedmont Federal operates and serves its customers and communities in a manner very similar to us. That was an important consideration. This historic partnership makes us both a stronger franchise and will provide our members with enhanced products and services. The additional resources Piedmont Federal is committed to providing our community and members along with the assurance that our employee group will remain intact were key factors in our decision to combine our banking institutions. We expect to continue to serve our customers and members like we always have, only with greater resources. In addition, the ability to secure a strong premium for our shareholders as a result of the merger represents a best-case scenario for all of our constituents.”

The transaction is expected to close during the fourth quarter of 2023, subject to regulatory and Wake Forest Federal shareholder approval and the satisfaction of the closing conditions to the merger.

Performance Trust Capital Partners and Luse Gorman, PC served as exclusive financial advisor and legal counsel to Piedmont Federal, respectively. Wake Forest Federal was advised by financial advisor Keefe, Bruyette & Woods, Inc., a Stifel Company, and legal counsel Kilpatrick Townsend & Stockton LLP.

Wake Forest Federal had $118 million in total assets as of March 31, 2023. Piedmont Federal had $1.16 billion as of the same date and 10 branch locations.

This news release may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Piedmont Federal. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management are generally identifiable by the use of words such as “expect,” “believe,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should,” or other expressions. We caution readers that these forward-looking statements, including, without limitation, those relating to the completion of the acquisition of Wake Forest Bancshares, Inc. and Wake Forest Federal (including the satisfaction of the closing conditions to the merger and the parties’ ability to receive all required regulatory approvals on terms that do not materially reduce the benefits of the merger to the parties under the merger agreement), our future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements due to several important factors. These factors include, but are not limited to: risks of loans and investments, including dependence on local and regional economic conditions; competition for our customers from other providers of financial services; possible adverse effects of changes in interest rates, including the effects of such changes on derivative contracts and associated accounting consequences; risks associated with our acquisition and growth strategies; and other risks which are difficult to predict and many of which are beyond our control. In addition, all statements in this news release, including forward-looking statements, speak only of the date they are made, and Piedmont Federal undertakes no obligation to update any statement in light of new information or future events.

About Piedmont Federal Savings Bank

At Piedmont Federal, our Purpose is simple – We Open Doors for You. We open doors for you to purchase a new home and to build savings; we open doors for your business to obtain the financing and banking services it needs; we open door for our communities to be better places to live. Our Values form the foundation of this Purpose: Being Authentic, Building Caring Relationships, Doing What’s Right, Going All In, and Moving Forward. These Values guide how we do business and we believe they are our competitive advantage. We pledge to live these Values in our service to you.

About Wake Forest Bancshares, Inc. and Wake Forest Federal Savings and Loan Association

Wake Forest Bancshares, Inc. is the parent company of Wake Forest Federal Savings and Loan Association. Based in Wake Forest, North Carolina since 1922, Wake Forest Federal offers both consumer related products as well as services for small businesses and not-for-profit organizations from its office in Wake Forest, (Wake County), North Carolina.

Contacts:
David P. Barksdale, Piedmont Financial Holding Company
dpbarksdale@piedmontfederal.com
(336) 830-0065

Renee Shaw, Wake Forest Bancshares, Inc.
renee.shaw@wakeforestfederal.com
(919) 556-5146