425: FB Financial to Expand into Alabama and Georgia with Southern States Merger

FB Financial Corporation and Southern States Bancshares, Inc. have announced a definitive merger agreement, expanding FB Financial's presence in Alabama and Georgia.

Summary

• FB Financial Corporation (FB Financial) and Southern States Bancshares, Inc. (Southern States) have entered into a definitive merger agreement.
• Southern States will merge with and into FB Financial.
• Southern States has 15 branches across Alabama and Georgia, and two loan production offices in the Atlanta MSA.
• As of December 31, 2024, Southern States reported total assets of $2.8 billion, loans of $2.2 billion, and deposits of $2.4 billion.
• Southern States shareholders will receive 0.800 shares of FB Financial common stock for each share of Southern States stock.
• Based on FB Financial's closing stock price of $47.05 per share as of March 28, 2025, the implied transaction value is approximately $37.64 per Southern States share, or $381 million in the aggregate.
• The merger is expected to close late in the third quarter or early in the fourth quarter of 2025.
• The transaction is subject to regulatory approvals, approval by FB Financial and Southern States shareholders, and other customary closing conditions.

Sentiment

Score: 8

Explanation: The document conveys a positive outlook on the merger, highlighting strategic benefits, financial attractiveness, and future success. The management comments are optimistic, and the transaction is expected to be accretive.

Positives

• The merger will expand FB Financial's presence in Alabama and Georgia.
• The combined company will be well-positioned to capitalize on talent and financial strength with an enhanced presence in exceptional markets.
• The transaction is expected to be accretive to FB Financial's earnings.
• Southern States has a strong history of conservative underwriting and asset quality.

Risks

• The risk that the cost savings and any revenue synergies from the proposed Transaction is less than or different from expectations.
• Disruption from the proposed Transaction with customer, supplier, or employee relationships.
• The occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement.
• The failure to obtain necessary regulatory approvals for the Transaction.
• The failure to obtain the approval of FB Financial and Southern States shareholders in connection with the Transaction.
• The possibility that the costs, fees, expenses, and charges related to the Transaction may be greater than anticipated, including as a result of unexpected or unknown factors, events, or liabilities.
• The failure of the conditions to the Transaction to be satisfied.
• The risks related to the integration of the combined businesses, including the risk that the integration will be materially delayed or will be more costly or difficult than expected.
• The diversion of management time on merger-related issues.
• The ability of FB Financial to effectively manage the larger and more complex operations of the combined company following the Transaction.
• The risks associated with FB Financials pursuit of future acquisitions.
• The risk of expansion into new geographic or product markets.
• Reputational risk and the reaction of the parties customers to the Transaction.
• FB Financials ability to successfully execute its various business strategies, including its ability to execute on potential acquisition opportunities.
• The risk of potential litigation or regulatory action related to the Transaction.
• General competitive, economic, political, and market conditions.

Future Outlook

The merger is expected to close late in the third quarter or early in the fourth quarter of 2025, pending regulatory and shareholder approvals.

Management Comments

• Christopher T. Holmes (FB Financial): 'We are thrilled about our proposed combination with Southern States. Southern States is an established community bank with a leading presence in the markets they serve. We are well-aligned culturally and look forward to continuing Southern States legacy of dedication and service to their customers.'
• Mark A. Chambers (Southern States): 'Our team is excited about this partnership and the opportunity it presents. We believe this transaction benefits all of our shareholders and customers, and the combined company will be well positioned to capitalize on talent and financial strength with an enhanced presence in exceptional markets.'

Industry Context

This announcement reflects a trend of consolidation within the banking industry, as institutions seek to expand their market presence and improve efficiency.

Comparison to Industry Standards

• The pro forma company is expected to have top quartile profitability amongst peers.
• The loan concentrations are expected to be well below industry guidelines.
• The transaction is expected to result in manageable tangible book value dilution, with an earnback period of under two years.
• The pro forma company will have a presence in the largest MSAs in GA/AL/TN.

Management Changes

Stakeholder Impact

• Shareholders of Southern States will receive FB Financial stock.
• Customers of both banks are expected to benefit from the combined company's enhanced presence and services.
• Employees of both banks will have opportunities within the combined company, with key employees and producers offered employment arrangements.

Next Steps

• Obtain regulatory approvals.
• Obtain approval from FB Financial and Southern States shareholders.
• Close the merger, expected in late Q3 or early Q4 2025.
• Integrate Southern States into FB Financial.

Key Dates

Keywords

merger, acquisition, FB Financial, Southern States Bancshares, banking, Alabama, Georgia, FirstBank, Southern States Bank