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Bank South will swap debt for preferred stock in Commercial Bank
Bank South Corp. will take an equity stake in Commercial Bank of Douglasville in exchange for retiring a called $4.5 million loan Commercial Bank had outstanding with Bank South, bank officials confirm.
Bank South will receive a new class of Commercial Bank preferred stock as payment, and takes the non-performing loan off its books. Commercial Bank, meanwhile, can convert that debt into a form of additional capital for the bank. "It is a win-win situation for both banks," says Bo Spalding, spokesman for Bank South.
The settlement ends months of tricky negotiations between the two banks that …