Community First Bancshares, Inc. (NASDAQ: CFBI) (“CFBI”), the
parent company of Newton Federal Bank, and ABB Financial Group,
Inc. (“ABB”), parent company of Affinity Bank, announced today that
they have entered into a definitive merger agreement whereby CFBI
has agreed to acquire ABB and its wholly owned bank subsidiary,
Affinity Bank, in an all-cash transaction. The transaction has been
unanimously approved by the Boards of Directors of each company and
is expected to close in the fourth quarter of 2019 or the first
quarter of 2020.
ABB is headquartered in Atlanta, less than one mile from The
Battery, the dynamic neighborhood that includes SunTrust Park, home
of the Atlanta Braves. ABB also operates a loan production office
in the fast-growing and affluent Cumming/Alpharetta, Georgia
market.
The merger will expand CFBI’s presence in the highly desirable
Atlanta MSA and accelerates CFBI’s growth strategy following its
mutual holding company reorganization and initial public offering
in 2017. It also enhances CFBI’s commercial banking capabilities
and adds an affluent dental clientele that has spurred ABB’s growth
over the last several years. The pro forma company will be one of
the 10-largest Georgia-based banks, by deposits, headquartered in
the Atlanta MSA.
Under the terms of the merger agreement, ABB shareholders will
receive cash merger consideration of $7.50 for each share of ABB.
Including consideration received by ABB option holders, the
transaction is valued at approximately $40.3 million. Additionally,
ABB’s preferred stock and trust preferred securities will be
redeemed at the close of the transaction, and all accrued but
unpaid dividends and interest will be paid on the preferred stock
and trust preferred securities. The transaction is expected to be
meaningfully accretive to CFBI’s 2020 earnings per share, excluding
one-time merger costs, and the tangible book value earn-back is
expected to be less than 3.5 years, utilizing the crossover
method.
“This transaction marks an important milestone for Newton
Federal Bank as we continue to position our organization as a
premier Atlanta community bank,” said Billy Fortson, Chairman of
CFBI. “ABB brings an attractive customer base and an energetic
banking team that, combined with our wonderful team at Newton
Federal Bank, will offer a best-of-class banking experience for
current and prospective customers. Our partnership will also
contribute to attracting talented, Atlanta-area bankers to further
our growth strategy and reward shareholders with strong
performance.”
“We are very excited to join the CFBI team,” said ABB Chief
Executive Officer Ed Cooney. “This combination is incredibly
positive for both banks’ clients, employees and shareholders. I’ve
known CFBI CEO Johnny Smith for a long time and look forward to
working with him and his team. Together, we will leverage the
combined resources and products to clients and prospects across our
combined markets in furthering our shared objective of providing a
superior banking solution for all stakeholders.”
“This is a transformative event for the Newton Federal
customers, employees and shareholders,” stated CFBI Chief Executive
Officer Johnny Smith. “Our respective management teams have spent a
considerable amount of time prior to this point, studying the
relative strengths and weaknesses of our banks. Together, we
believe the strengths are enhanced and the weaknesses are
diminished. I believe there will be very few Georgia community
banks that will match our diverse lines of business and attractive
market demographics.”
Upon completion of the transaction, Ed Cooney will become CEO of
CFBI and Newton Federal Bank and will also become a director of
both entities. Johnny Smith of CFBI will remain President of CFBI
and Newton Federal Bank and will continue to serve on the boards of
both entities. Affinity Bank will merge into Newton Federal Bank.
Based on June 30, 2019 bank-level financials, and excluding merger
accounting adjustments, the combined institution will have
approximately $613 million in assets, $465 million in deposits and
$500 million in loans.
Completion of the transaction is subject to customary closing
conditions, including the receipt of required regulatory approvals
and the approval of ABB’s shareholders.
Banks Street Partners, a Performance Trust Company, acted as
financial advisor to CFBI, and Luse Gorman, PC, served as its legal
advisor. RP Financial, LC. provided a Fairness Opinion to ABB, and
Miller & Martin, PLLC served as its legal advisor.
About Community First Bancshares, Inc.
Community First Bancshares, Inc. (NASDAQ: CFBI) is a federal
corporation based in Covington, Georgia with $305 million in
assets. The company’s banking subsidiary, Newton Federal Bank,
opened in 1928 and currently operates two full-service offices in
Covington, Georgia and loan production offices in Athens, Georgia
and Braselton, Georgia. The bank specializes in providing a full
range of consumer and commercial banking products to individuals,
small businesses and corporations. Additional information about the
company and the bank’s products and services can be found at
www.newtonfederal.com.
About ABB Financial Group, Inc.
ABB Financial Group, Inc. is the parent company of Affinity
Bank. Affinity Bank is based in Atlanta, Georgia and was formed in
2002. Affinity Bank, with $308 million in assets, delivers a full
slate of commercial banking services through a high-tech,
high-touch delivery system and is a Southeast leader in remote
deposit technology. The bank is also recognized as a leading
banking provider to dentists throughout the Southeast and founded
the Dental Offices Managers Association (DOMA), a provider of
quality continuing education to dental office managers.
Furthermore, the bank is experiencing great success with their
online bank, Fitness Bank, which kicked off earlier this year
providing competitive savings rates for those “athletes” who
achieve a certain number of steps each month on their fitness
device. In addition to its main office in Atlanta, Affinity Bank
operates a loan production office serving the Alpharetta and
Cumming, GA markets.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements.” In
general, forward-looking statements usually use words such as
“may,” “believe,” “expect,” “anticipate,” “intend,” “will,”
“should,” “plan,” “estimate,” “predict,” “continue” and “potential”
or the negative of these terms or other comparable terminology,
including statements related to the expected timing of the closing
of the merger, the expected returns and other benefits of the
merger, to shareholders, expected improvement in operating
efficiency resulting from the merger, estimated expense reductions
resulting from the transactions and the timing of achievement of
such reductions, the impact on diluted earnings per share and
tangible book value, and the effect of the merger on CFBI’s capital
ratios. Forward-looking statements represent management’s beliefs,
based upon information available at the time the statements are
made, with regard to the matters addressed; they are not guarantees
of future performance. Forward-looking statements are subject to
numerous assumptions, risks and uncertainties that change over time
and could cause actual results or financial condition to differ
materially from those expressed in or implied by such
statements.
Factors that could cause or contribute to such differences
include, but are not limited to, the possibility that expected
benefits may not materialize in the time frames expected or at all,
or may be more costly to achieve; that the merger may not be timely
completed, if at all; that prior to completion of the merger or
thereafter, the parties’ respective businesses may not perform as
expected due to transaction-related uncertainties or other factors;
that the parties are unable to implement successful integration
strategies; that the required regulatory, shareholder, or other
closing conditions are not satisfied in a timely manner, or at all;
reputational risks and the reaction of the parties’ customers to
the merger; diversion of management time to merger-related issues;
and other factors and risk influences. Consequently, no
forward-looking statement can be guaranteed. Neither CFBI nor ABB
undertakes any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
ADDITIONAL INFORMATION
This press release is not a solicitation of any vote or approval
of the CFBI or ABB shareholders and is not a substitute for the
proxy statement or any other documents which ABB may send to its
shareholders in connection with the proposed merger. This press
release does not constitute an offer to sell or the solicitation of
an offer to buy any securities to be issued in connection with the
proposed merger.
In connection with the proposed merger, ABB will send a proxy
statement to its shareholders, as well as other relevant documents
concerning the proposed merger. BEFORE MAKING ANY VOTING DECISION,
SHAREHOLDERS OF ABB ARE URGED TO CAREFULLY READ THE ENTIRE MERGER
PROXY STATEMENT REGARDING THE PROPOSED MERGER WHEN IT BECOMES
AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED MERGER. Investors and security holders may obtain a
free copy of the merger proxy statement (when available) at ABB’s
website at www.myaffinitybank.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20190820005640/en/
Johnny S. Smith Chief Executive Officer Community First
Bancshares, Inc. (770) 786-7088 johnnysmith@newtonfederal.com
Edward J. Cooney Chief Executive Officer ABB Financial Group,
Inc. (678) 742-9990 ecooney@myaffinitybank.com
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