Griffin Financial Advises First Priority Financial Corp. in its Merger with Affinity Bancorp, Inc.

Overview
The merger between First Priority Financial Corp. and Affinity Bancorp, Inc., announced in May 2012, closed on February 28, 2013. The Companies raised $6.6 million in new capital to support the merger. The transaction establishes a $450 million in total assets bank spanning Bucks, Montgomery, Chester and Berks Counties in Pennsylvania.

Situation
First Priority Financial Corp. recognized the importance of scale in today’s regulatory and operating environment, and engaged Griffin to assist in finding a strategic solution to combat the higher cost structure of today’s banking environment and to create value for investors.

Solution
Griffin introduced Affinity Bancorp to First Priority and worked with First Priority to structure a merger. The merger was designed to improve the operating efficiencies of both institutions and enhance profitability and geographic reach, with 10 branches stretched across four Pennsylvania counties.

The resulting ownership is 38% former Affinity Shareholders and 62% First Priority Shareholders, based on relative tangible common equity contribution. Management and Board control over the combined organization is similarly shared, and executive management of both institutions has been retained.

The combined company will become an Exchange Act reporting company and will seek to list its shares on NASDAQ.

Griffin advised First Priority in raising the capital necessary to cover purchase accounting marks and meet regulatory capital requirements.

The solution provides the additional scale both institutions were seeking, and also provides a significantly higher lending limit to each bank and leverages strengths from both sides. The transaction also creates a broader market and a very attractive combined footprint, diversifying the combined institutions’ business across Southeastern Pennsylvania.