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Ameris Bancorp (ABCB) to Buy Fidelity Southern for $750.7M

Zacks Equity Research

In an effort to expand its market presence, Ameris Bancorp ABCB recently announced a deal to buy Fidelity Southern Corporation LION for $750.7million. The deal, expected to close in the second quarter of 2019, is subject to approval of regulatory authorities and shareholders of both companies.

Following the deal’s announcement on Dec 18, shares of Ameris Bancorp have declined nearly 5.7%. While the transaction will likely be beneficial for the company, bearish broader markets hurt investor’s overall sentiments. This supposedly led to the fall in the company’s share prices.

Details and Benefits

Per the agreement, shareholders of Fidelity Southern will receive 0.80 share of Ameris Bancorp for each share of Fidelity Southern.  Notably, based on Ameris Bancorp’s closing price of $34.02 on Dec 14, 2018, the deal is valued at $27.22 per share.

Following the deal’s closure, Ameris Bancorp will be roughly $16.2 billion in assets (based on Sep 30, 2018 data), excluding the accounting adjustments for the purchase.

Palmer Proctor Jr., president of Fidelity Southern said,”The combination of Ameris and Fidelity joins two franchises that are very similar in culture, complementary in terms of our lines of business and well positioned competitively, resulting in a $16 billion asset bank second to none in terms of management strength and financial resources."

The acquisition will be accretive to Ameris Bancorp’s earnings in the mid-single digit range, after the company realizes cost saving of 40% of Fidelity Southern’s projected non-interest expense. Further, the company will benefit from revenue synergies. Also, the bank will benefit from Fidelity Southern’s low-cost deposits (25% less expensive than Ameris Bank’)

Conclusion

Ameris Bancorp has been expanding inorganically over the past several years.  Earlier this year the company acquired Hamilton State Bancshares, Inc and Atlantic Coast Financial Corporation

Shares of Ameris Bancorp have lost 44.2% in the last six months compared with the 26% decline registered by the industry.



Currently Ameris Bancorp carries a Zacks Rank #3 (Hold).

Stocks to Consider

A couple of better-ranked stocks from the finance space are Chemung Financial Corp CHMG and City Holding Company CHCO

Chemung Financial’s shares have gained 17.5 % in the past two years. Further its earnings estimate for 2018 moved up 5% in the past 60 days. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

City Holding Company carries Zacks Rank #2 (Buy) at present. The stock has gained 4.8% in two years’ time. Its earnings estimates for the current year moved 3.27% north over the past 60 days.    

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Ameris Bancorp (ABCB) : Free Stock Analysis Report
 
Fidelity Southern Corporation (LION) : Free Stock Analysis Report
 
City Holding Company (CHCO) : Free Stock Analysis Report
 
Chemung Financial Corp (CHMG) : Free Stock Analysis Report
 
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