Ameris Bancorp’s (ABCB - Free Report) deal to acquire Fidelity Southern Corporation (LION - Free Report) for $750.7 million has received approval of shareholders of both companies. The agreement, expected to close later this quarter, was announced in December 2018.
Notably, the transaction still requires regulatory approvals and is subject to customary closing conditions.
Per the agreement, shareholders of Atlanta, GA-based Fidelity Southern will receive 0.80 share of Ameris Bancorp for each share of Fidelity Southern. Following the deal closure, Ameris Bancorp will have a branch network across four states and roughly $17 billion in assets (excluding the accounting adjustments for the purchase).
Further, the all-stock deal will be accretive to Ameris Bancorp’s earnings in the mid-single digit range, after realizing cost saving of 40% on Fidelity Southern’s projected non-interest expense. Also, the company will benefit from revenue synergies and Fidelity Southern’s low-cost deposits.
Moreover, five Fidelity Southern directors will be joining the Ameris Bancorp board, which will be increased in size to 14 members upon closure of the buyout.
At the time of announcement of deal, Dennis J. Zember Jr., CEO of Ameris Bancorp had commented, “This partnership not only strengthens our management team, but also creates a dynamic franchise with the opportunity for quality growth for the foreseeable future.”
Ameris Bancorp has been expanding inorganically over the past several years. In 2018, the company acquired Hamilton State Bancshares, Inc and Atlantic Coast Financial Corporation.
With strong liquidity position and scope to expand, Ameris Bancorp is likely to continue following its inorganic growth strategy. These efforts are expected to support the company’s financials, going forward.
Shares of Ameris Bancorp have rallied 18.1% so far this year, underperforming the industry’s rise of 20.5%.
Currently, it carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past year, banking sector has been witnessing an increase in M&A activities. Improving economy, easing banking regulations and lower tax rates have resulted in considerable liquidity for banks.
Further, as the companies continue to expand into different growth avenues, M&As are expected to remain part of their growth initiatives. A couple of banks that have entered into M&A agreements recently are Glacier Bancorp (GBCI - Free Report) and BancorpSouth Bank (BXS - Free Report) .
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