What's at stake: Atlanta's massive banking market continues to attract interest from banks of all sizes. Fidelity's planned acquisition comes just days after the $187.4 billion-asset KeyCorp announced plans to base a five-person commercial lending team in Atlanta.
Supporting data: Bank M&A activity has slowed significantly amid war-related uncertainty, with deal volume for most of March falling to just $404 million, according to one analyst.
Expert quote: "Our partnership will enhance Affinity Bank's capabilities and suite of services which will benefit customers as we continue to expand our Georgia presence." — Affinity Bancshares CEO Ed Cooney
Fidelity BancShares in Fuquay-Varina, N.C., has agreed to pay $142.8 million to acquire Affinity Bancshares in Norcross, Ga. The all-cash deal will give the 115-year-old Fidelity its first presence in the Peach State.
The deal is the latest example of a bank seeking an entry point into the Atlanta region, which is home to 6.5 million people. Both of Affinity's two branches lie within the Atlanta metropolitan statistical area. Midway through last year, Affinity held 0.31% of the region's $246 billion of bank deposits, according to data from the Federal Deposit Insurance Corp.
"We are incredibly excited … to expand our presence into Georgia," Fidelity CEO Mary Willis said Monday in a press release. "We look forward to building on Affinity Bank's strong local reputation while continuing to serve customers and communities with the same personal attention and care they know and trust."
Affinity's agreement with the $4.39 billion-asset Fidelity marks its second attempt to sell itself in less than two years.
The $882 million-asset Affinity
Fidelity, the holding company for Fidelity Bank, will pay Affinity investors $23 per share, an 18.5% premium over the seller's March 27 closing price of $19.41. The sales price represents a 28.6% premium over Affinity's $17.89 adjusted per-share tangible book value on Dec. 31.
Affinity shares soared on news of its pending sale. Shares were trading at $22.26, up 14.68% since Friday's close. Fidelity is privately held.
Fidelity expects to complete the acquisition in the third quarter. The combined company will start with $5.5 billion of assets, $4.6 billion of deposits and loans totaling $3.6 billion, Fidelity said. It will operate 52 branches in North Carolina, two in South Carolina, two in Georgia and one in Virginia.
"Fidelity Bank and Affinity Bank share tremendous cultures built over many years of service to our respective customers, employees and communities," Affinity CEO Ed Cooney said in the press release. "Our partnership will enhance Affinity Bank's capabilities and suite of services which will benefit customers as we continue to expand our Georgia presence."
Neither Cooney nor Willis responded to requests for comment by deadline.
Fidelity's planned acquisition of Affinity is a relatively rare instance of a bank merger announced since the start of the war with Iran, as geopolitical uncertainty appears to have injected caution into banks' strategic calculus.
Industry-wide deal value — excluding the Fidelity-Affinity combination — plummeted to $406 million in March, down from $12.9 billion in February, according to Seaport Research Partners Senior analyst Laurie Hunsicker, who writes a weekly report on banking merger-and-acquisition activity.
Fidelity's roots date back to 1909, when it operated as the Bank of Fuquay. It adopted the Fidelity brand in 1970 after merging with the Bank of Biscoe in Biscoe, N.C. Affinity was founded as a depositor-owned thrift in 1928. It converted to public ownership in two steps, in 2017 and 2021.
Atlanta, which ranks as one of the largest metropolitan statistical areas in the country, continues to attract new banks.
The $184.4 billion-asset KeyCorp announced Tuesday that it will base a five-person middle-market banking team in the city. First Community Corp. in Lexington, S.C., expanded into the region in January, completing its
Affinity's two branches are in Gwinnett County and Cobb County, both of which are part of the Atlanta region.
