APCU/Center Parc Credit Union and Affinity Bancshares, Inc. Announce Mutual Termination of Purchase Agreement

Rhea-AI Summary

APCU/Center Parc Credit Union and Affinity Bancshares, Inc. (NASDAQ: AFBI) have mutually agreed to terminate their previously announced purchase agreement, under which APCU would have acquired Affinity Bank, National Association. The termination follows APCU's discussions with regulatory agencies, after which APCU decided to withdraw its application with the Georgia Department of Banking and Finance regarding the proposed transaction. The boards of directors of all parties have agreed to this termination, effective immediately.

Positive

• None.

Negative

• Termination of planned acquisition deal
• Failed regulatory process for merger completion
• Strategic growth opportunity lost for both parties

Insights

M&A Expert

The mutual termination of the purchase agreement between APCU/Center Parc Credit Union and Affinity Bancshares represents a significant setback in the consolidation landscape of regional financial institutions. The withdrawal of APCU's application with the Georgia Department of Banking and Finance suggests regulatory hurdles were encountered during the review process. Credit union acquisitions of banks have faced increasing scrutiny from regulators, particularly regarding capital requirements and community impact assessments.

This development could potentially impact Affinity's near-term strategic options and market position. The termination likely means Affinity will need to reassess its strategic alternatives, which could include seeking other potential buyers or focusing on organic growth. For shareholders, this news typically creates uncertainty about the company's immediate future direction and could lead to share price volatility.

Banking Analyst

The termination of this acquisition deal carries broader implications for the banking sector, particularly in the Southeast region. Credit union-bank acquisitions have been a growing trend, with credit unions seeking to expand their footprint and service offerings through bank purchases. This termination, stemming from regulatory discussions, may signal heightened regulatory scrutiny of such cross-industry acquisitions.

For Affinity Bancshares, with a market cap of $140.2 million, maintaining independence means they'll need to compete effectively in a challenging banking environment characterized by high interest rates and increasing deposit costs. The bank's ability to generate organic growth and maintain profitability will be closely watched by investors in the coming quarters.

ATLANTA--(BUSINESS WIRE)-- Atlanta Postal Credit Union (“APCU”), along with its community-based subsidiary, Center Parc Credit Union, and Affinity Bancshares, Inc (“Affinity”) (NASDAQ: AFBI), the holding company for Affinity Bank, National Association (“Affinity Bank”), jointly announced today that they have agreed to terminate the purchase agreement pursuant to which the credit union would acquire Affinity Bank, effective immediately.

The boards of directors of each of the parties agreed to the termination following discussions APCU had with the applicable regulatory agencies. Following these discussions, APCU informed Affinity and Affinity Bank that APCU would withdraw its application with the Georgia Department of Banking and Finance with respect to the transactions contemplated by the purchase agreement.

About APCU/Center Parc

At APCU/Center Parc, providing our members first-class service has always been our priority. We're a member-owned, not-for-profit financial cooperative committed to helping hardworking people save money and prosper. For almost 100 years, we've stayed true to these beliefs. As Georgia's oldest credit union, we're proud of our tradition of service. Over the years, APCU/ Center Parc assets have grown from an initial investment of $2,505 to nearly $2.5 billion. Today, we're one of the largest credit unions in the country. We're proud to serve more than 105,000 members nationwide with a full complement of financial products and services designed to save them money. For more information, visit www.apcu.com.

About Affinity Bank

Affinity Bancshares, Inc. is a Maryland corporation, based in Covington, Georgia, with approximately $870 million in assets. Its bank subsidiary, Affinity Bank, was founded in 1928 and is a leader in the business community specializing in developing industry specific solutions to support niche / select businesses, such as: commercial real estate, construction, dental and medical practices, and indirect auto lending. Affinity Bank serves its customers with three branches – two in the city of Covington and one located on Galleria Parkway in Atlanta. Additionally, it operates a loan production office in Alpharetta. For more information, please visit www.myaffinitybank.com and www.newtonfederal.com.

Forward-Looking Statements

This press release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933. These forward-looking statements are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and this statement is included for purposes of complying with these safe harbor provisions. Readers should not place undue reliance on such forward-looking statements, which speak only as of the date made. These forward-looking statements are based on current plans and expectations, which are subject to a number of risk factors and uncertainties that could cause future results to differ materially from historical performance or future expectations.

APCU, Center Parc and Affinity undertake no obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events or circumstances.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241230374950/en/

APCU/Center Parc

Merideth Miller

M2 The Agency

(281) 882-3045

pr@m2theagency.com

Affinity Bancshares and Affinity Bank

Edward J. Cooney

Chief Executive Officer

(678) 742-9990

Source: Affinity Bancshares, Inc.

FAQ

Why did APCU and Affinity Bancshares (AFBI) terminate their purchase agreement?

The termination occurred following APCU's discussions with regulatory agencies, which led to APCU withdrawing its application with the Georgia Department of Banking and Finance for the proposed acquisition.

What is the immediate impact of the terminated merger on Affinity Bancshares (AFBI) shareholders?

The termination means that AFBI will remain an independent entity, and the expected benefits and synergies from the proposed merger will not be realized.

When was the APCU-AFBI purchase agreement termination announced?

The mutual termination of the purchase agreement between APCU and Affinity Bancshares (AFBI) was announced effective immediately on the date of the press release.

Which regulatory body was involved in the APCU-AFBI deal termination?

The Georgia Department of Banking and Finance was the regulatory body involved, from which APCU withdrew its application for the proposed acquisition of Affinity Bank.