Financial giant FB set to purchase Southern States for approximately $381 million
FB Financial Corp., the parent company of FirstBank, has announced a strategic move with the $381 million acquisition of Southern States Bancshares, the parent company of Southern States Bank. The deal, expected to close late in the third quarter or early in the fourth quarter, subject to regulatory and shareholder approvals, will significantly expand FB Financial's geographical footprint, particularly in the Atlanta area.
The acquisition adds 15 branches across Alabama and Georgia, including two loan production offices in the Atlanta Metropolitan Statistical Area (MSA), to FB Financial's existing network. This move brings a total of $2.8 billion in assets, $2.2 billion in loans, and $2.4 billion in deposits to the combined entity, as of December 31, 2024.
This merger not only increases total assets by about $2.9 billion but also improves operational efficiency due to Southern States' superior efficiency ratio (46.4% vs. FB Financial's 60.9%). FB Financial's Chief Financial Officer, Michael Mettee, projects cost savings of about 25% of Southern States' annual non-interest expenses, amounting to $368 million by 2026. These efficiencies and balance sheet optimizations support improved profitability and allow capital redeployment into growth initiatives within key geographic markets like Atlanta.
Southern States' leadership, including CEO Mark Chambers and CFO Lynn Joyce, will take on "meaningful roles" at the combined company, signaling a strategic integration to leverage their regional expertise. The presence of loan production offices in Atlanta enhances FB Financial’s ability to deepen customer relationships and loan origination capacity in this major metropolitan market, bolstering FB Financial’s competitive position and brand visibility in the southeast region.
The all-stock deal will result in Southern States shareholders receiving 0.8 shares of FB Financial common stock for each Southern States share they own. The implied transaction value is about $37.64 per Southern States share, based on FB Financial's closing stock price of $47.05 per share as of Friday.
FB Financial's CEO, Christopher Holmes, refers to a period of "disruption" in the banking industry, and says it's leading to more recruiting opportunities. This acquisition is a testament to FB Financial's commitment to growth and its strategic approach to capitalize on opportunities in exceptional markets.
The transaction is expected to benefit all shareholders and customers, with the combined company well-positioned to capitalize on talent and financial strength in exceptional markets. FB Financial Corp. estimates the acquisition will result in 12% earnings per share accretion in 2026. If a strategic opportunity arises before the deal closes, FB executives will "continue to have conversations and be reactive."
In summary, the acquisition enhances FB Financial’s geographical expansion by adding a strong regional footprint in Alabama and Georgia and notably increasing its market presence in the Atlanta area through branch and loan production office additions, while also enabling operational efficiencies and capital growth deployment.
Cross-border transactions within the financial industry are often a part of strategic business decisions, and this acquisition by FB Financial Corp. is no exception. The addition of Southern States Bancshares, with its assets, loans, and deposits valued at $2.8 billion, will not only increase the combined entity's balance sheet but also strengthen FB Financial's base in the banking-and-insurance sector, particularly in the Atlanta area.
This merger will bolster FB Financial's operational efficiency, leveraging the superior efficiency ratio of Southern States and generating cost savings of approximately 25% of Southern States' annual non-interest expenses, amounting to $368 million by 2026. These improvements will support increased profitability and growth initiatives within key markets like Atlanta.
