FB Financial (FBK) M&A Announcement summary

Deal rationale and strategic fit

• The merger combines two culturally aligned banks with a customer-centric focus and shared community banking values, expanding presence in Alabama and Georgia, including key markets like Birmingham, Huntsville, East Alabama, West Georgia, and Atlanta.

• The combined entity leverages enhanced talent, financial strength, and a disciplined credit culture to capitalize on opportunities in high-growth suburban and metropolitan markets.

• Both institutions have a history of strong growth, solid returns, and a proven expansion strategy targeting favorable markets.

• The deal positions the company for top quartile profitability, future organic and external growth, and a leading Southeast banking franchise.

• Thorough due diligence process supports strategic fit and risk mitigation.

Financial terms and conditions

• All-stock transaction: Southern States shareholders receive 0.800 FB Financial shares per Southern States share, with an implied value of $37.64 per share and a total deal value of $381 million.

• Pro forma ownership: approximately 85% FB Financial, 15% Southern States.

• Estimated pre-tax transaction costs of $38 million; loan portfolio mark at 3.2% ($71 million), with $36 million credit-related and $35 million interest rate-related.

• Core deposit intangible estimated at 2% of non-time deposits; $10 million sub-debt write-down.

• The transaction is structured as a tax-free reorganization for federal income tax purposes.

Synergies and expected cost savings

• Cost savings estimated at 25% of Southern States' annual noninterest expense, phased in over 2025 and 2026, with full realization thereafter.

• Approximately 12% EPS accretion expected in 2026 with full cost savings realized.

• Tangible book value dilution under 4%, earned back in less than two years.

• Margin expansion opportunities from repricing short-duration CDs and optimizing the investment portfolio.

• Limited overlap between organizations, with key Southern States executives remaining post-close.