SUMMARY

This summary highlights information contained elsewhere in this joint proxy statement/prospectus and may not contain all of the information that is important to you. We urge you to carefully read the entire joint proxy statement/prospectus and the other documents to which we refer in order to fully understand the merger and the related transactions. See “Where You Can Find More Information” on page [291]. Each item in this summary refers to the page of this joint proxy statement/prospectus on which that subject is discussed in more detail.

Information about the Parties

First Priority Financial Corp. (page 82)

First Priority is a Pennsylvania business corporation and bank holding company, which along with its bank subsidiary, First Priority Bank, is headquartered in Malvern, Pennsylvania. First Priority Bank, with $279.2 million in assets as of June 30, 2012, was chartered in November, 2005 and opened for business to the public in January, 2006 as a state-chartered, FDIC insured, full service commercial bank providing personal and business lending, deposit products and wealth management services through its offices in Malvern, Wyomissing, Newtown, Blue Bell, Plumstead, and Towamencin, Pennsylvania . The common stock of First Priority is not currently traded on the open market. First Priority’s website can be accessed at http://www.fpbk.com .

The principal executive offices of First Priority are located at First Priority Financial Corp., 2 West Liberty Boulevard, Suite 104, Malvern, Pennsylvania 19355, and its telephone number is (610) 280-7100.

Affinity Bancorp, Inc. (page 218)

Affinity is a Pennsylvania business corporation and is registered as a bank holding company. Affinity Bank of Pennsylvania is a wholly-owned subsidiary of Affinity and is a state-chartered, FDIC insured, full-service community bank providing general commercial and consumer banking services. Affinity Bank of Pennsylvania, which opened for business in April 2003, has $174.3 million in assets as of June 30, 2012 and is headquartered in Wyomissing, Pennsylvania. Affinity Bank currently operates five full-service banking offices in Wyomissing, Reading, Sinking Spring, Muhlenberg and Exeter, Berks County, Pennsylvania. The common stock of Affinity is not currently traded on the open market. Affinity’s website can be accessed at www.affinitybankpa.com.

The principal executive offices of Affinity are located at 1310 Broadcasting Road, PO Box 7068, Wyomissing PA 19610, and its telephone number is (610) 898-7700.

The Merger (page 36)

The terms and conditions of the merger are contained in the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus and incorporated by reference herein. Please carefully read the merger agreement as it is the legal document that governs the merger.

Affinity Will Merge into First Priority

We are proposing the merger of Affinity with and into First Priority. As a result, First Priority will continue as the surviving company.

 

First Priority Will Hold Its Special Meeting on [ — ] (page 77)

The First Priority special meeting will be held on [ — ] at [ — ], local time, at The Desmond Hotel and Conference Center, 1 Liberty Boulevard, Malvern, Pennsylvania 19355. At the special meeting, First Priority shareholders will be asked to:

 

1.

Adopt the merger agreement; and

 

2.

Approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

Record Date . Only holders of record of First Priority common stock at the close of business on [ — ] will be entitled to vote at the special meeting. Each share of First Priority common stock is entitled to one vote. As of the First Priority record date, there were [3,144,053] shares of First Priority common stock issued and outstanding and entitled to vote at the special meeting.

Required Vote . The affirmative vote of a majority of the First Priority votes cast is required to adopt the merger agreement and to adjourn the special meeting, in certain circumstances, to solicit additional proxies. A majority of the outstanding First Priority common stock entitled to vote is necessary to constitute a quorum in order to transact business at the special meeting.

As of the record date, directors and executive officers of First Priority and their affiliates had the right to vote [964,764] shares of First Priority common stock, or [30.7]% of the outstanding First Priority common stock entitled to be voted at the special meeting. In accordance with the terms of the merger agreement, each of the directors and officers of First Priority has executed an Affiliate Letter in favor of Affinity pursuant to which he or she has agreed to vote all shares of First Priority common stock owned by him or her in favor of adoption of the merger agreement and the transactions contemplated thereby.

Affinity Will Hold Its Special Meeting on [ — ] (page 214)

The Affinity special meeting will be held on [ — ] at [ — ], local time, at [ — ]. At the special meeting, Affinity shareholders will be asked to:

 

1.

Adopt the merger agreement; and

 

2.

Approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

Record Date . Only holders of record of Affinity common stock at the close of business on [ — ] will be entitled to vote at the special meeting. Each share of Affinity common stock is entitled to one vote. As of the Affinity record date, there were [1,970,706] shares of Affinity common stock issued and outstanding and entitled to vote at the special meeting.

Required Vote . The affirmative vote of a majority of the Affinity votes cast is required to adopt the merger agreement and to adjourn the special meeting, in certain circumstances, to solicit additional proxies. A majority of the outstanding Affinity common stock entitled to vote is necessary to constitute a quorum in order to transact business at the special meeting.

As of the record date, directors and executive officers of Affinity and their affiliates had the right to vote [308,301] shares of Affinity common stock, or [15.6]% of the outstanding Affinity common stock entitled to be voted at the special meeting. In accordance with the terms of the merger agreement, each of the directors and officers of Affinity has executed an Affiliate Letter in favor of First Priority pursuant to which he or she has agreed to vote all shares of Affinity common stock owned by him or her in favor of adoption of the merger agreement and the transactions contemplated thereby.

 

Affinity Shareholders Will Receive Shares of First Priority Common Stock in the Merger (page 64)

Each share of Affinity common stock issued and outstanding immediately prior to the completion of the merger will be converted into the right to receive 0.9813 shares of First Priority common stock, which we refer to as the “exchange ratio.” Fractional shares of First Priority common stock resulting from the application of the exchange ratio to an Affinity shareholder’s holdings of First Priority common stock will be converted to the right to receive a cash payment for each such fractional share. The cash payment will equal an amount, rounded to the nearest cent and without interest, equal to the product of (i) the fraction of a share to which such holder would otherwise have been entitled and (ii) the fair market value of First Priority common stock on the trading day immediately preceding the closing date as mutually determined in good faith by First Priority, Affinity and their financial advisors.

Affinity Stock Options and Warrants Will Be Converted into First Priority Options and Warrants (page 65)

Upon completion of the merger, each outstanding warrant and option to purchase shares of Affinity common stock, whether or not then exercisable, will be converted, in its entirety, automatically into warrants and options, respectively, to purchase shares of First Priority common stock upon the same terms and conditions as the Affinity warrants and options, except that the number of shares and exercise price shall be adjusted to reflect the exchange ratio.

Certain Expected Material United States Federal Income Tax Treatment as a Result of the Merger

The merger has been structured to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and it is a condition to the completion of the merger that each of First Priority and Affinity receive a written opinion from their respective legal counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. For further discussion of the material U.S. federal income tax consequences of the merger, see “ The Merger—Certain Material Federal Income Tax Consequences ,” beginning on page 75.

Holders of Affinity common stock should consult their tax advisors to determine the tax consequences to them, including the application and effect of any state, local or non-U.S. income and other tax laws, of the merger.

Accounting Treatment of the Merger (page 75)

The merger will be treated as a “business combination” using the acquisition method of accounting with First Priority treated as the acquiror under generally accepted accounting principles, or GAAP.

Trading Market

Currently, neither the common stock of First Priority nor the common stock of Affinity is traded on a national securities exchange, listing service, or similar trading platform for listing or quotation of securities and there is currently no public trading market for the common stock of either First Priority or Affinity. However, in connection with the contemplation of the merger, First Priority has agreed to apply for listing or quotation of its common stock on or before April 30, 2013.

 

Griffin Financial Group, LLC Has Provided an Opinion to the First Priority Board of Directors Regarding the Fairness of the Merger Consideration (page 42)

First Priority’s financial advisor, Griffin Financial Group, LLC, or Griffin, has conducted financial analyses and delivered an opinion to First Priority’s board of directors that, as of May 23, 2012, the exchange ratio was fair from a financial point of view to First Priority shareholders.

The full text of Griffin’s opinion is attached as Annex B to this joint proxy statement/prospectus. First Priority shareholders should read that opinion and the summary description of Griffin’s opinion contained in this joint proxy statement/prospectus in their entirety. The opinion of Griffin does not reflect any developments that may have occurred or may occur after the date of its opinion and prior to the completion of the merger. First Priority does not expect that it will request an updated opinion from Griffin.

First Priority will pay Griffin a fee, currently estimated to be $350,000, upon successful completion of the merger.

Boenning & Scattergood, Inc. Has Provided an Opinion to the Affinity Board of Directors Regarding the Fairness of the Merger Consideration (page 49)

Affinity’s financial advisor, Boenning & Scattergood, Inc., or Boenning, has conducted financial analyses and delivered an opinion to Affinity’s board of directors that, as of May 23, 2012, the exchange ratio was fair from a financial point of view to Affinity shareholders.

The full text of Boenning’s opinion is attached as Annex C to this joint proxy statement/prospectus. Affinity shareholders should read that opinion and the summary description of Boenning’s opinion contained in this joint proxy statement/prospectus in their entirety. The opinion of Boenning does not reflect any developments that may have occurred or may occur after the date of its opinion and prior to the completion of the merger. Affinity does not expect that it will request an updated opinion from Boenning.

Affinity paid Boenning an upfront engagement fee of $30,000, and an additional $45,000 when Affinity entered into a definitive agreement pertaining to the merger. Upon the closing of the merger, Boenning will receive an additional $50,000, plus expenses.

Board of Directors and Executive Officers of First Priority after the Merger (page 57)

At the closing of the merger, the size of the First Priority board of directors will be fixed at 12 directors, consisting of David E. Sparks, the current Chairman and Chief Executive Officer of First Priority, Steven A. Ehrlich, the current Chairman and Chief Executive Officer of Affinity, six current directors of First Priority who are independent directors as provided in the NASDAQ listing rules and four current directors of Affinity who are independent directors as provided in the NASDAQ listing rules. There will be three classes of the board of directors of First Priority and the particular class in which the Affinity directors will serve shall be mutually agreed by Affinity and First Priority, with the understanding that appointees of each party will be distributed among the classes of directorship of First Priority.

Effective on closing of the merger, Mr. Sparks shall be appointed Chairman and Chief Executive Officer of First Priority and Mr. Ehrlich shall be appointed President of First Priority. The remaining officers of First Priority prior to the consummation of the merger will continue as the officers of First Priority after the merger.

 

The First Priority Board of Directors Recommends That First Priority Shareholders Vote “FOR” Adoption of the Agreement and Plan of Merger (page 42)

The First Priority board of directors believes that the merger is in the best interests of First Priority and its shareholders and has unanimously approved the merger and the merger agreement. The First Priority board of directors recommends that First Priority shareholders vote “FOR” adoption of the agreement and plan of merger. The First Priority board also recommends that its shareholders vote “FOR” the proposal to adjourn the special meeting, if necessary, to solicit additional proxies.

The Affinity Board of Directors Recommends That Affinity Shareholders Vote “FOR” Adoption of the Agreement and Plan of Merger (page 49)

The Affinity board of directors believes that the merger is in the best interests of Affinity and its shareholders and has unanimously approved the merger and the merger agreement. The Affinity board of directors recommends that Affinity shareholders vote “FOR” adoption of the agreement and plan of merger. The Affinity board also recommends that its shareholders vote “FOR” the proposal to adjourn the special meeting, if necessary, to solicit additional proxies.

Affinity’s Directors and Executive Officers Have Financial Interests in the Merger that May Differ from Your Interests (page 60)

In considering the information contained in this joint proxy statement/prospectus, you should be aware that Affinity’s executive officers and directors have financial interests in the merger that may be different from, or in addition to, the interests of Affinity shareholders. These additional interests of Affinity’s executive officers and directors may create potential conflicts of interest and cause some of these persons to view the proposed transaction differently than you may view it as a shareholder.

Affinity’s board of directors was aware of these interests and took them into account in its decision to approve the agreement and plan of merger. For information concerning these interests, please see the discussion under the caption “ The Merger—Affinity’s Directors and Executive Officers Have Financial Interests in the Merger ” on page 60.

Holders of Affinity Common Stock Have Dissenters’ Rights (page 57)

If you are an Affinity shareholder, you have the right under Pennsylvania law to dissent from the merger agreement and the merger, and to demand and receive cash for the fair value of your shares of Affinity common stock. For a complete description of the dissenters’ rights of Affinity shareholders, please see the discussion under the caption “ The Merger—Affinity Shareholders Have Dissenters’ Rights in the Merger ” on page 57. In order to assert dissenters’ rights, you must:

 

•

File a written notice of intent to dissent with Affinity prior to the shareholder vote at the special meeting of shareholders;

 

•

Make no change in your beneficial ownership of Affinity common stock after you give notice of your intention to demand fair value of your shares of Affinity common stock; and

 

•

Not vote to adopt the merger agreement at the special meeting.

 

•

File a written demand for payment and deposit any certificates representing the Affinity shares for which dissenters’ rights are being asserted as requested by the notice that will be sent by First Priority or Affinity after the completion of the merger; and

 

•

Comply with certain other statutory procedures set forth in Pennsylvania law.

 

If you are an Affinity shareholder and you sign and return your proxy without voting instructions, we will vote your proxy in favor of the transaction and you will lose any dissenters’ rights that you may have. A copy of the relevant provisions of Pennsylvania law related to dissenters’ rights are attached to this proxy statement/prospectus as Annex D.

The Rights of Affinity Shareholders Will Be Governed by Pennsylvania Law and the First Priority Articles of Incorporation and Bylaws after the Merger

The rights of Affinity shareholders will change as a result of the merger due to differences in First Priority’s and Affinity’s governing documents. A description of shareholder rights under each of the First Priority and Affinity governing documents, and the material differences between them, is included in the section entitled “ Comparison of Shareholders’ Rights ” found on page 287.

Conditions That Must Be Satisfied or Waived for the Merger to Occur (page 72)

Currently, we expect to complete the merger in the fourth quarter of 2012. As more fully described in this joint proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others, First Priority’s completion of a minimum $6 million private placement of equity securities, the completion of which is conditioned upon the closing of the merger; approval by the requisite vote of the First Priority shareholders and the Affinity shareholders; the receipt of all required regulatory approvals from the Federal Reserve Board (“FRB”), Federal Deposit Insurance Corporation (“FDIC”), and the Pennsylvania Department of Banking (“PDB”); the right to demand appraisal rights under the Pennsylvania Business Corporation Law having expired or been unavailable with respect to at least 97% of the outstanding Affinity common shares, and the receipt of a legal opinion from counsel to each of First Priority and Affinity regarding the tax treatment of the merger.

We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

No Solicitation of Other Offers 70

Each of First Priority and Affinity has agreed that it, its subsidiaries, its directors and officers and those of its subsidiaries will not, and each of First Priority and Affinity will use its reasonable best efforts to cause its and each of its subsidiaries’ employees and agents not to, between the date of the merger agreement and the closing of the merger, directly or indirectly:

 

•

Initiate, solicit, induce or encourage, or take any action to facilitate the making of, any inquiry, offer or proposal which constitutes, relates or could reasonably be expected to lead to an alternative acquisition proposal;

 

•

Respond to any inquiry relating to an alternative acquisition proposal or an alternative acquisition transaction;

 

•

Recommend or endorse an alternative acquisition transaction;

 

•

Release anyone from, waive any provisions of, or fail to enforce any confidentiality agreement or standstill agreement to which either First Priority or Affinity is a respective party;

 

•

Participate in any discussions or negotiations regarding, or furnish information or data to any person that may relate to an alternative acquisition proposal; or

 

•

Enter into any agreement, agreement in principle or letter of intent with respect to any alternative acquisition proposal or approve or resolve to approve any alternative acquisition proposal or any agreement, agreement in principle or letter of intent relating to an alternative acquisition proposal.

 

The merger agreement does not, however, prohibit First Priority or Affinity, as the case may be, from taking such actions prior to its respective shareholders’ meeting, if its board of directors determines, in good faith, that such discussions of an alternative acquisition proposal are required for its board of directors to fulfill its fiduciary duties.

For further discussion of the restrictions on solicitation of acquisition proposals from third parties, see “ The Merger Agreement—Agreement Not to Solicit Other Offers ” beginning on page 70.

Termination of the Merger Agreement (page 73)

We may mutually agree to terminate the merger agreement before completing the merger, even after Affinity shareholder approval. In addition, either of us may decide to terminate the merger agreement, if (i) a governmental entity issues a final order that is not appealable prohibiting the merger, (ii) a bank regulator which must grant a regulatory approval as a condition to the merger denies such approval of the merger and such denial has become final and is not appealable, (iii) the shareholders of First Priority or Affinity fail to approve the merger at their respective special meetings, or (iv) the other party breaches the merger agreement in a way that would entitle the party seeking to terminate the agreement not to consummate the merger, subject to the right of the breaching party to cure the breach within 30 days following written notice. Either of us may terminate the merger agreement if the merger has not been completed by February 28, 2013, unless the reason the merger has not been completed by that date is a breach of the merger agreement by the company seeking to terminate the merger agreement.

First Priority may terminate the merger agreement if the Affinity board of directors, in connection with the receipt of an alternative acquisition proposal, (1) enters into an acquisition agreement with respect to the alternative acquisition proposal, (2) terminates the merger agreement, (3) fails to make, withdraws, modifies or qualifies its recommendation of the merger agreement in a manner adverse to First Priority, or (4) delivers a written notice to First Priority of its determination to accept the alternative acquisition proposal. Additionally, First Priority may terminate the merger agreement if First Priority receives an alternative acquisition proposal and delivers a written notice to Affinity of its determination to accept the alternative acquisition proposal.

Affinity may terminate the merger agreement if the First Priority board of directors, in connection with the receipt of an alternative acquisition proposal, (1) enters into an acquisition agreement with respect to the alternative acquisition proposal, (2) terminates the merger agreement, (3) fails to make, withdraws, modifies or qualifies its recommendation of the merger agreement in a manner adverse to Affinity, or (4) delivers a written notice to Affinity of its determination to accept the alternative acquisition proposal. Additionally, Affinity may terminate the merger agreement if Affinity receives an alternative acquisition proposal and delivers a written notice to First Priority of its determination to accept the alternative acquisition proposal.

Termination Fee (page 74)

Affinity will pay First Priority a termination fee of $1 million in the event that the merger agreement is terminated:

 

•

By First Priority because Affinity’s shareholders fail to approve the merger at the special meeting and prior thereto, there has been a publicly proposed or announced alternative acquisition proposal for Affinity that is agreed to or consummated within 12 months following termination; or

 

•

By First Priority because Affinity has received an alternative acquisition proposal, and Affinity (1) enters into an acquisition agreement with respect to the alternative acquisition proposal, (2) terminates the merger agreement, (3) fails to make, withdraws, modifies or qualifies its recommendation of the merger agreement in a manner adverse to First Priority, or (4) delivers a written notice to First Priority of its determination to accept the alternative acquisition proposal; or

 

•

By Affinity, if Affinity receives an alternative acquisition proposal and delivers a written notice to First Priority of its determination to accept the alternative acquisition proposal.

In the event of termination in accordance with the first bullet above, the termination fee is payable in full within ten (10) business days after written demand by First Priority after closing by Affinity of an alternative acquisition proposal. In the event of termination in accordance with the second and third bullets above, 25% of the termination fee is payable in full within ten (10) business days after First Priority giving notice of such termination and the remaining 75% of the termination fee is payable within ten (10) business days after written demand by First Priority after closing by Affinity of an alternative acquisition proposal.

First Priority will pay Affinity a termination fee of $1 million in the event that the merger agreement is terminated:

 

•

By Affinity because First Priority’s shareholders fail to approve the merger at the special meeting and prior thereto, there has been a publicly proposed or announced alternative acquisition proposal for First Priority that is agreed to or consummated within 12 months following termination; or

 

•

By Affinity because First Priority has received an alternative acquisition proposal, and First Priority (1) enters into an acquisition agreement with respect to the alternative acquisition proposal, (2) terminates the merger agreement, (3) fails to make, withdraws, modifies or qualifies its recommendation of the merger agreement in a manner adverse to Affinity, or (4) delivers a written notice to Affinity of its determination to accept the alternative acquisition proposal; or

 

•

By First Priority, if First Priority receives an alternative acquisition proposal and delivers a written notice to Affinity of its determination to accept the alternative acquisition proposal.

In the event of termination in accordance with the first bullet above, the termination fee is payable in full within ten (10) business days after written demand by Affinity after closing by First Priority of an alternative acquisition proposal. In the event of termination in accordance with the second and third bullets above, 25% of the termination fee is payable in full within ten (10) business days after Affinity giving notice of such termination and the remaining 75% of the termination fee is payable within ten (10) business days after written demand by Affinity after closing by First Priority of an alternative acquisition proposal.

Regulatory Approvals Required for the Merger (page 60)

The merger is subject to certain regulatory approvals and we must receive approval from the FRB, FDIC and PDB. Additionally, First Priority must provide all notices to, and receive any required approvals and authorizations from, the Treasury under the terms of its outstanding preferred stock issued to the Treasury in connection with First Priority’s participation in the Treasury’s Troubled Assets Relief Program (“TARP”). First Priority will file the required applications and notices. The merger will not proceed in the absence of regulatory approvals. Although First Priority does not know of any reason why it would not obtain regulatory approvals in a timely manner, First Priority cannot be certain when such approvals will be obtained or if they will be obtained.