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Ameris Bancorp (ABCB) Closes Fidelity Deal, Appoints New CEO

Zacks Equity Research

Ameris Bancorp ABCB has completed the buyout of Atlanta, GA-based Fidelity Southern Corporation in an all-stock deal. Additionally, Fidelity's banking subsidiary — Fidelity Bank — has been merged with and into Ameris Bancorp’s banking subsidiary, Ameris Bank.

Per the terms of agreement, shareholders of Fidelity will receive 0.80 share of Ameris Bancorp for each share of Fidelity.

At the time of announcement of the deal, it was stated that it will be accretive to Ameris Bancorp’s earnings in the mid-single digit range, after realization of cost saving of 40% on Fidelity’s projected non-interest expenses. The company will also benefit from revenue synergies and Fidelity’s low-cost deposits.

The deal, announced in December 2018, has expanded Ameris Bancorp’s footprint over Florida and Georgia. Further, based on Mar 31, 2019, data, the combined company had $16.4 billion in assets, $13.8 billion in deposits and total loans worth $12.5 billion.

These factors cheered investors, leading to 1.1% rally in Ameris Bancorp stock since the closure of the deal.

Concurrently, H. Palmer Proctor, Jr. (formerly President of Fidelity and CEO of Fidelity Bank) has been appointed as the new CEO of Ameris Bancorp and Ameris Bank. This follows the resignation of the company’s earlier President, CEO and board of director Dennis J. Zember Jr. Also, five former Fidelity directors have been appointed to the board of directors of Ameris Bancorp and Ameris Bank.

Further, Ameris Bank is planning “brand enhancement process” to “create a sharper, stronger and more recognizable brand, with elements from both Ameris Bank's and Fidelity Bank's current brand identities.” The initiative is expected to be completed by this year.

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

With strong liquidity position and scope to expand, Ameris Bancorp is likely to continue following its inorganic growth strategy. These, in turn, are expected to support the company’s financials, going forward.

Shares of Ameris Bancorp have rallied 24.4% over the past six months, outperforming the industry’s rise of 13.5%.

Currently, Ameris Bancorp carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of late, banking sector is witnessing a rise in M&A activities. Improving economy, easing banking regulations and lower tax rates have resulted in considerable liquidity for banks. Further, as small and mid-size banks continue to expand into different growth avenues, M&As are expected to remain part of their growth initiatives. Some banks that have entered into M&A agreements recently are Glacier Bancorp GBCI, Valley National Bancorp VLY and Prosperity Bancshares, Inc. PB.

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