Heritage Southeast Bancorporation, Inc. (“HSBI”) announced today that HSBI, Heritage Southeast Bank and VyStar Credit Union (“VyStar”) have mutually agreed to extend the time available to obtain regulatory approvals, satisfy other closing conditions and prepare for a smooth transition of HSBI’s business to VyStar, by waiving their respective rights to terminate the purchase agreement on or after December 31, 2021, until February 28, 2022.

HSBI, Heritage Southeast Bank and VyStar each continue to pursue regulatory approvals from the FDIC, the NCUA, the Georgia Department of Banking and Finance and the Florida Office of Financial Regulation.

While the parties continue to work toward closing the proposed business combination in 2021, the parties recognize that the timing of regulatory approval and customer notifications may result in the closing of the transaction occurring during the first quarter of 2022. However, there can be no assurance that the parties will receive regulatory approval during the first quarter, or at all. Required customer notifications include, among other things, a notice that must be given to customers at least 30 days before completion of the transaction.

Under the terms of the purchase agreement, VyStar will pay HSBI an aggregate amount estimated to provide HSBI with sufficient cash to have $27.00 per share in cash available for distribution to its shareholders after satisfaction of all of HSBI’s unconsolidated debt and any other obligations (the “per share consideration”). The per share consideration available to HSBI shareholders is subject to variations, both positive and negative, based on costs related to winding down Heritage Southeast Bank and HSBI and distributing the remaining assets to stockholders, including satisfaction of liabilities related to the liquidation accounts maintained by Heritage Southeast Bank, satisfaction of certain indebtedness, satisfaction of certain tax amounts, and termination of certain contracts, among others.  We do not intend to give further guidance as to these variations prior to closing.

In addition, pursuant to the terms of the purchase agreement, the aggregate purchase price paid by VyStar to HSBI will increase by an amount equal to HSBI’s consolidated net profit, after certain deductions, for each month from October 1, 2021, through the closing date. For the nine months ended September 30, 2021, HSBI’s monthly consolidated net profit, less certain deductions provided for in the purchase agreement, averaged approximately $1.2 million per month. No assurances are provided that future performance will be comparable to past performance.

The transaction has been approved by HSBI shareholders, but remains subject to customary closing conditions, including the receipt of regulatory approvals. The distribution of cash to HSBI stockholders is expected to occur shortly following completion of the sale of assets to VyStar.