Fidelity BancShares to Acquire Affinity Bancshares, Marking Its Debut in Georgia
Fidelity BancShares, based in Fuquay-Varina, North Carolina, has recently announced a $142.8 million all-cash deal to acquire Affinity Bancshares in Norcross, Georgia, marking Fidelity’s first significant foray into the Peach State. This move is the latest in a series of banks seeking an entrance into the Atlanta region, a bustling metropolitan area with a population of 6.5 million.
This acquisition comes after KeyCorp, with $187.4 billion in assets, unveiled plans to establish a five-person commercial lending team in Atlanta. The surge of interest in Atlanta’s banking market highlights the city’s growing economic potential.
Affinity Bancshares and Fidelity BancShares: A Strategic Partnership
Both of Affinity’s branches are located within the Atlanta metropolitan area, holding 0.31% of the region’s $246 billion bank deposits midway through last year, as per the Federal Deposit Insurance Corp data. The agreement with Fidelity, a $4.39 billion-asset company, marks Affinity’s second attempt to sell itself in less than two years.
In 2024, Affinity, an $882 million-asset bank, had struck a deal with Atlanta Postal Credit Union, which was later terminated following discussions with regulators. Now, Fidelity will pay Affinity investors $23 per share, an 18.5% premium over the seller’s March 27 closing price of $19.41. This sales price denotes a 28.6% premium over Affinity’s $17.89 adjusted per-share tangible book value as of December 31.
Fidelity’s Expansion in Georgia
“We are incredibly excited to expand our presence into Georgia,” Fidelity CEO Mary Willis said. “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 shares soared on news of its impending sale, trading at $22.26, up 14.68% since Friday’s close. Fidelity, however, is privately held. The anticipated completion of the acquisition is in the third quarter. The merger will result in a combined company with $5.5 billion of assets, $4.6 billion of deposits, and loans totaling $3.6 billion, operating 52 branches in North Carolina, two in South Carolina, two in Georgia, and one in Virginia.
Merger Amid Geopolitical Uncertainty
Despite the slowdown in bank M&A activity due to war-related uncertainties, Fidelity’s planned acquisition of Affinity is a rare instance of a bank merger since the start of the war with Iran. The overall deal value in the banking industry plummeted to $406 million in March, down from $12.9 billion in February, according to Laurie Hunsicker, a senior analyst at Seaport Research Partners.
However, Atlanta, one of the largest metropolitan statistical areas in the country, continues to attract new banks. This lucrative banking market is bound to be a game-changer for many, including Fidelity, as they seek to expand their footprints.
“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. “Our partnership will enhance Affinity Bank’s capabilities and suite of services which will benefit customers as we continue to expand our Georgia presence.”
With roots dating back to 1909, Fidelity has steadily grown, merging with the Bank of Biscoe in Biscoe, N.C. in 1970 to become the Fidelity brand we know today. Meanwhile, Affinity was founded as a depositor-owned thrift in 1928 and converted to public ownership in two steps, in 2017 and 2021.
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