Will Create Premier Southeastern Bank
Focused on Business and Private Banking
Atlantic Capital Bancshares, Inc. (“Atlantic Capital”) and First
Security Group, Inc. (NASDAQ: FSGI) (“First Security” or “FSG”)
jointly announced today the signing of a definitive merger
agreement pursuant to which Atlantic Capital will acquire First
Security. The transaction has been unanimously approved by the
boards of directors of each company. Atlantic Capital is a bank
holding company headquartered in Atlanta, Georgia and the parent of
Atlantic Capital Bank. First Security is a bank holding company
headquartered in Chattanooga, Tennessee and the parent of FSGBank,
N.A. (“FSGBank”).
Under terms of the merger agreement, Atlantic Capital will
purchase First Security for total consideration of approximately
$160 million. FSG shareholders may elect cash equal to $2.35 per
share, stock based on a fixed exchange ratio of 0.188 shares of
Atlantic Capital common stock for each FSG share or any combination
thereof. FSG shareholder elections may be adjusted as necessary to
result in an overall ratio of 40 percent cash and 60 percent stock.
Atlantic Capital intends to register its shares with the SEC and
seek a listing on NASDAQ concurrent with closing of the
transaction.
In conjunction with the merger, Atlantic Capital has signed a
stock purchase agreement with Trident IV, L.P. and Trident IV
Professionals Fund, L.P., investment funds managed by Stone Point
Capital LLC, for a $25.0 million private placement of Atlantic
Capital common stock at $12.60 per share, which is expected close
upon completion of the merger, subject to regulatory approvals and
other customary conditions. The net proceeds of the private
placement, combined with holding company cash and alternative
sources of debt financing, will be used to fund the cash portion of
the merger consideration. Aggregate shares outstanding following
the merger and private placement are expected to be approximately
23.0 million.
Upon completion of the transaction, the combined company is
expected to have approximately $2.7 billion in assets, $2.2 billion
in deposits and $1.9 billion in net loans. Atlantic Capital will be
based in Atlanta with the bank maintaining corporate offices in
Atlanta and Chattanooga. Banking offices will continue to operate
under their current brands.
Douglas L. Williams, Chief Executive Officer of Atlantic
Capital, will be CEO of the combined entity, with D. Michael
Kramer, Chief Executive Officer of First Security, serving as
President and Chief Operating Officer. Both will serve on the board
of directors, which will be chaired by the current Atlantic Capital
Chairman Walter M. Deriso, Jr.
“Atlantic Capital focuses on corporate banking to small and
mid-sized companies, which is perfectly compatible with FSG’s
strategy and focus on small business and commercial banking,” Mr.
Kramer said. “Likewise, the ability to market FSG’s core
competencies in the ninth largest metropolitan area in the U.S.
will provide significant opportunities for enhanced revenue and
growth.”
The transaction is expected to achieve significant financial
benefits for shareholders. Through the identified cost synergies,
Atlantic Capital expects the transaction to be neutral to estimated
pro forma earnings in the first full year of combined operations,
with significant earnings accretion projected thereafter. The
merger will create a financial institution well positioned to
achieve its targeted financial performance objectives of a 1
percent return on average assets and 12 percent return on average
tangible common equity within 24 months of closing.
From a capital perspective, future balance sheet growth is
projected to be supported by a strong capital base established at
the completion of the merger as well as ongoing earnings. The pro
forma consolidated tangible common equity to tangible assets ratio
is estimated to exceed 9.0 percent; the consolidated Tier 1
leverage ratio is projected to total approximately 8.0 percent; and
the consolidated total risk-based capital ratio is expected to
exceed 11.0 percent.
“Our goal is to build a premier financial institution in the
Southeast by focusing on business and private banking,” said Mr.
Williams. “Each bank brings complementary strengths that will only
be enhanced by the combined size and geographic reach of the
merger. The merger will provide the foundation for a strong
financial institution that will produce solid returns for our
shareholders.”
The transaction is expected to close late in the third quarter
or early in the fourth quarter of 2015 and is subject to Atlantic
Capital and First Security stockholder approval, regulatory
approval and other conditions set forth in the merger agreement.
Pursuant to the agreement’s terms, Atlantic Capital Bank will merge
with and into FSGBank.
Atlantic Capital engaged Macquarie Capital as its financial
advisor and Womble Carlyle Sandridge & Rice, LLP as its legal
advisor. First Security was advised by the investment banking firm
of Sandler O’Neill + Partners, L.P. and the law firm of Bryan Cave
LLP.
About Atlantic Capital Bancshares, Inc.
Atlantic Capital is a bank holding company headquartered in
Atlanta, Georgia. Atlantic Capital was founded in 2007 through the
then-largest equity capital raise in U.S. history by a de novo bank
holding company. Atlantic Capital’s wholly-owned bank subsidiary,
Atlantic Capital Bank, has grown to $1.3 billion in assets with a
single office and significant investments in technology, talent and
customer service. Atlantic Capital Bank serves privately held
small- and mid‐size companies and not-for-profit organizations;
institutional-caliber commercial real estate developers and
investors; and individuals throughout metropolitan Atlanta.
About First Security Group, Inc.
First Security Group is a bank holding company headquartered in
Chattanooga, Tennessee, with $1.1 billion in assets. Founded in
1999, First Security’s community bank subsidiary, FSGBank, has 26
full-service banking offices in east and middle Tennessee and north
Georgia. FSGBank provides retail and small business banking
services, trust and investment management, mortgage banking,
financial planning, and internet banking (www.fsgbank.com).
INVESTOR CONFERENCE CALL INFORMATION:
A joint conference call to discuss the transaction is scheduled
for 10:30 a.m. Eastern Time on Thursday, March 26, 2015. Those
wishing to participate in the call may dial toll-free
1-844-435-3689, or international +1-920-663-6216 and enter the
passcode 12739455. Participants should dial in at least 15 minutes
before the call begins.
A presentation regarding the transaction will be available for
download at www.atlanticcapitalbank.com and www.fsgbank.com on the
investor relations page.
Additional Information About the Atlantic Capital/First
Security Transaction:
This communication relates to the proposed merger transaction
involving Atlantic Capital and First Security. In connection with
the proposed merger, Atlantic Capital and First Security will file
a registration statement on Form S-4 that will include a joint
proxy statement/prospectus, and other relevant documents concerning
the merger with the Securities and Exchange Commission (the “SEC”).
This report does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. BEFORE MAKING ANY VOTING OR INVESTMENT
DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE
SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY
REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT ATLANTIC CAPITAL, FIRST
SECURITY AND THE PROPOSED MERGER. When available, the joint proxy
statement/prospectus will be delivered to shareholders of Atlantic
Capital and stockholders of First Security. Investors will also be
able to obtain copies of the joint proxy statement/prospectus and
other relevant documents (when they become available) free of
charge at the SEC’s website (www.sec.gov). Copies of documents
filed with the SEC by Atlantic Capital will be available free of
charge from Carol Tiarsmith, Executive Vice President and Chief
Financial Officer, Atlantic Capital Bancshares, 3280 Peachtree
Road, N.E., Suite 1600, Atlanta, Georgia, 30305, telephone:
404-995-6050. Documents filed with the SEC by First Security will
be available free of charge from First Security by contacting John
R. Haddock, Executive Vice President and Chief Financial Officer,
First Security Group, Inc., 531 Broad Street, Chattanooga,
Tennessee, telephone: (423) 266-2000.
Atlantic Capital, First Security and certain of their directors,
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies
from the shareholders of Atlantic Capital and the stockholders of
First Security in connection with the proposed merger. Information
about the directors and executive officers of Atlantic Capital will
be included in the joint proxy statement/prospectus for the
proposed transaction. Information about the directors and executive
officers of First Security is included in the proxy statement for
its 2014 annual meeting of stockholders, which was filed with the
SEC on April 23, 2014. Additional information regarding the
interests of such participants and other persons who may be deemed
participants in the transaction will be included in the joint proxy
statement/prospectus and the other relevant documents filed with
the SEC when they become available.
“Safe Harbor” Statement Under the Private Securities
Litigation Reform Act of 1995:
This report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
which Congress passed in an effort to encourage companies to
provide information about their anticipated future financial
performance. This act protects a company from unwarranted
litigation if actual results are different from management
expectations. This report reflects the current views and estimates
of future economic circumstances, industry conditions, company
performance, and financial results of the management of Atlantic
Capital and First Security. These forward-looking statements are
subject to a number of factors and uncertainties which could cause
Atlantic Capital’s, First Security’s or the combined company’s
actual results and experience to differ from the anticipated
results and expectations expressed in such forward-looking
statements, and such differences may be material. Forward-looking
statements speak only as of the date they are made and neither
Atlantic Capital nor First Security assumes any duty to update
forward-looking statements. In addition to factors previously
disclosed in First Security’s reports filed with the SEC and those
identified elsewhere in this report, these forward-looking
statements include, but are not limited to, statements about (i)
the expected benefits of the transaction between Atlantic Capital
and First Security and between Atlantic Capital Bank and FSGBank,
including future financial and operating results, cost savings,
enhanced revenues and the expected market position of the combined
company that may be realized from the transaction, and (ii)
Atlantic Capital’s and First Security’s plans, objectives,
expectations and intentions and other statements contained in this
report that are not historical facts. Other statements identified
by words such as “expects,” “anticipates,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “targets,” “will,” “projects” or
words of similar meaning generally are intended to identify
forward-looking statements. These statements are based upon the
current beliefs and expectations of Atlantic Capital’s and First
Security’s management and are inherently subject to significant
business, economic and competitive risks and uncertainties, many of
which are beyond their respective control. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change. Actual results may differ from those indicated or implied
in the forward-looking statements and such differences may be
material.
The following risks, among others, could cause actual results to
differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: (1) the
businesses of Atlantic Capital and First Security may not integrate
successfully or the integration may be more difficult,
time-consuming or costly than expected; (2) the expected growth
opportunities and cost savings from the transaction may not be
fully realized or may take longer to realize than expected; (3)
revenues following the transaction may be lower than expected as a
result of losses of customers or other reasons, including issues
arising in connection with integration of the two banks; (4)
deposit attrition, operating costs, customer loss and business
disruption following the transaction, including difficulties in
maintaining relationships with employees, may be greater than
expected; (5) governmental approvals of the transaction may not be
obtained on the proposed terms or expected timeframe; (6) the terms
of the proposed transaction may need to be modified to satisfy such
approvals or conditions; (7) Atlantic Capital’s shareholders or
First Security’s shareholders may fail to approve the transaction;
(8) reputational risks and the reaction of the companies’ customers
to the transaction; (9) diversion of management time on merger
related issues; (10) changes in asset quality and credit risk; (11)
the cost and availability of capital; (12) customer acceptance of
the combined company’s products and services; (13) customer
borrowing, repayment, investment and deposit practices; (14) the
introduction, withdrawal, success and timing of business
initiatives; (15) the impact, extent, and timing of technological
changes; (16) severe catastrophic events in our geographic area;
(17) a weakening of the economies in which the combined company
will conduct operations may adversely affect its operating results;
(18) the U.S. legal and regulatory framework, including those
associated with the Dodd Frank Wall Street Reform and Consumer
Protection Act, could adversely affect the operating results of the
combined company; (19) the interest rate environment may compress
margins and adversely affect net interest income; and (20)
competition from other financial services companies in the
companies’ markets could adversely affect operations. Additional
factors that could cause First Security’s results to differ
materially from those described in the forward-looking statements
can be found in First Security’s reports (such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K) filed with the SEC and available at the SEC’s website
(www.sec.gov). All subsequent written and oral forward-looking
statements concerning Atlantic Capital, First Security or the
proposed merger or other matters and attributable to Atlantic
Capital, First Security or any person acting on either of their
behalf are expressly qualified in their entirety by the cautionary
statements above. Atlantic Capital and First Security do not
undertake any obligation to update any forward-looking statement,
whether written or oral, to reflect circumstances or events that
occur after the date the forward-looking statements are made.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20150325006384/en/
Atlantic Capital:Carol Tiarsmith, 404-995-6050EVP &
CFOcarol.tiarsmith@atlcapbank.comorFirst Security:John R. Haddock,
423-308-2075EVP & CFOjhaddock@fsgbank.com
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