SouthState Corporation and Atlantic Capital Bancshares signed a definitive agreement pursuant to which Atlantic Capital will merge with and into SouthState in an all-stock transaction with an aggregate value of approximately $542 million, or $26.43 per share of Atlantic Capital common stock.

Atlantic Capital, based in Atlanta, has approximately $3.8 billion in total assets, $3.3 billion in total deposits and $2.3 billion in total loans as of June 30, 2021, and operates one branch in the Atlanta metro area and one branch in Athens, GA.

According to SouthState, following this merger, it will have a top 10 deposit market share in Atlanta, with approximately $5 billion in pro forma deposits. Upon merger completion, the combined company will have pro forma total assets of $44 billion, deposits of $36 billion, gross loans of $26 billion and a market capitalization of approximately $5.7 billion.

“We are pleased to announce this partnership with Doug and his team at Atlantic Capital. Atlanta is a strategically important market for us, and this attractive, in-market transaction significantly expands our market share in one of the fastest growing cities in the country,” John C. Corbett, CEO of SouthState, said. “Additionally, Atlantic Capital provides a high-growth fintech and payments platform and a seasoned team of Atlanta bankers with a proven record of success.”

“This partnership with SouthState enhances our purpose to fuel prosperity for our shareholders, clients and teammates,” Douglas L. Williams, president and CEO of Atlantic Capital, said. “SouthState’s larger capital base and broader range of capabilities will strengthen our client relationships and expand our new business opportunities. Our companies are tightly aligned culturally; we operate on the same core banking and treasury management platforms, and our credit and risk management philosophies and processes are similar.”

Subject to the terms of the merger agreement, Atlantic Capital shareholders will receive 0.36 shares of SouthState common stock for each outstanding share of Atlantic Capital common stock they own. Based on SouthState’s stock price of $73.42 as of July 22, 2021, this equates to a per share value of $26.43 and an aggregate transaction value of $542 million. Additionally, two Atlantic Capital directors will join both SouthState’s board and SouthState Bank’s board.

The transaction is expected to result in 3% earnings per share accretion on a fully phased in basis and minimal tangible book value dilution, which is expected to be earned back in two years.

The boards of directors of both Atlantic Capital and SouthState unanimously approved the merger agreement. Completion of the merger is subject to customary closing conditions, including receipt of required regulatory approvals and the approval by shareholders of Atlantic Capital. The transaction is expected to close in Q1/22.

Raymond James & Associates served as exclusive financial advisor and Davis Polk & Wardwell served as legal counsel to SouthState in the transaction. J.P. Morgan Securities served as exclusive financial advisor and Sullivan & Cromwell and Troutman Pepper Hamilton Sanders served as legal counsel to Atlantic Capital in the transaction.