DEFA14A: Atlanta Postal Credit Union to Acquire Affinity Bank in All-Cash Deal

Atlanta Postal Credit Union (APCU) will acquire Affinity Bank in an all-cash transaction, pending regulatory and shareholder approvals, with an expected closing in late 2024 or early 2025.

Summary

• Atlanta Postal Credit Union (APCU) has entered into a definitive agreement to acquire Affinity Bank.
• The transaction is an all-cash deal where APCU will purchase substantially all assets and assume substantially all liabilities of Affinity Bank.
• The deal is expected to close in the fourth quarter of 2024 or the first quarter of 2025, pending regulatory and shareholder approvals.
• Affinity shareholders are estimated to receive $22.50 per share in cash, subject to potential adjustments for tax payments.
• Following the acquisition, Affinity and Affinity Bank will liquidate and distribute remaining assets to shareholders.
• Affinity Bank has approximately $870 million in assets.
• APCU's assets are nearly $2.5 billion and serves more than 105,000 members nationwide.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the all-cash acquisition, which provides a clear exit strategy for Affinity shareholders. The deal is expected to benefit both APCU and Affinity Bank's customers.

Positives

• Affinity shareholders are expected to receive $22.50 per share in cash.
• APCU will expand its reach and market base through the acquisition.
• Affinity Bank customers will gain access to APCU/Center Parc's range of financial products and services.
• APCU/Center Parc will continue to operate Affinity Bank's locations in Newton County and Northwest Atlanta.

Risks

• Failure to satisfy closing conditions in a timely manner or at all.
• Failure of Affinity shareholders to approve the agreement.
• Failure to obtain governmental approvals.
• Changes in the amount of cash to be received by Affinity Bank and/or to be utilized by Affinity Bank and Affinity following the completion of the proposed transaction.
• Disruptions to the parties' businesses as a result of the announcement and pendency of the transaction.
• Changes in general business, industry or economic conditions or competition.
• Adverse changes or conditions in the capital and financial markets.
• Changes in interest rates or credit availability.
• Unanticipated regulatory or judicial proceedings and liabilities and other costs.

Future Outlook

The transaction is expected to close in the fourth quarter of 2024 or the first quarter of 2025, subject to regulatory and shareholder approvals. Following the closing, Affinity and Affinity Bank will liquidate and distribute their remaining assets to Affinity shareholders.

Management Comments

• Blake Graham, APCU/Center Parc President & CEO, stated that they look forward to welcoming Affinity Bank's customers as new members and exceeding their expectations.
• Edward J. Cooney, President and Chief Executive Officer of Affinity, commented that Affinity Bank has been committed to serving its clients and local communities and is excited about joining the APCU/Center Parc team.

Industry Context

This acquisition reflects a trend of consolidation within the banking and credit union sectors, as institutions seek to expand their market reach and customer base. Credit unions are increasingly looking to acquire community banks to grow quickly.

Comparison to Industry Standards

• Acquisitions of banks by credit unions are becoming more common, with deals like United Federal Credit Union's acquisition of St. Joseph County State Bank serving as recent examples.
• The $22.50 per share cash consideration is a key metric for Affinity shareholders, and its attractiveness would be assessed relative to the bank's book value and recent trading prices.
• APCU's asset size of nearly $2.5 billion places it among the larger credit unions in the US, while Affinity Bank's $870 million in assets is typical for a community bank.

Stakeholder Impact

• Affinity shareholders are expected to receive $22.50 per share in cash.
• Affinity Bank customers will become members of APCU/Center Parc, gaining access to a wider range of financial products and services.
• APCU/Center Parc employees may see expanded opportunities as the organization grows.

Next Steps

• Affinity will distribute a proxy statement to its shareholders.
• A special meeting of shareholders will be held to vote on the approval of the transaction.
• Regulatory approvals will be sought.
• The transaction is expected to close in the fourth quarter of 2024 or the first quarter of 2025.

Key Dates

Keywords

acquisition, APCU, Affinity Bank, merger, credit union, banking