Mergers and acquisitions

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Mergers and acquisitions

Note (2)—Mergers and acquisitions:

Clayton Bank and Trust and American City Bank

On February 8, 2017, the Company and FirstBank entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Clayton HC, Inc., a Tennessee Corporation (“Seller”), Clayton Bank and Trust, a Tennessee state bank and wholly-owned subsidiary of Seller (“CBT”), American City Bank, a Tennessee state bank and wholly-owned subsidiary of Seller (“ACB,” and together with CBT, the “Clayton Banks”), and James L. Clayton, the majority shareholder of Seller (“Clayton”). On the terms and subject to the conditions set forth in the Purchase Agreement, FirstBank has committed to purchase from Seller all of the issued and outstanding shares of the Clayton Banks (the “Stock Purchase”). Following the consummation of the Stock Purchase, the Clayton Banks will merge with and into FirstBank, with FirstBank continuing as the surviving banking corporation. The acquisition is valued at approximately $284.2 million at the date of announcement.  The Clayton Banks had approximately $1,199 million in assets, $1,065 million in loans and $929 million in deposits, and 18 banking offices in Tennessee as of March 31, 2017. Consummation of the Stock Purchase is subject to, among other things, the receipt of approval by regulatory authorities.  The acquisition is expected to be completed sometime in the third quarter of 2017, subject to the satisfaction of the closing conditions thereto.

In connection with the transaction, the Company incurred $487 in merger and conversion expenses during the three month ended March 31, 2017.

Northwest Georgia Bank

On September 18, 2015, the Bank completed its acquisition of Northwest Georgia Bank (NWGB), a bank headquartered in Ringgold, Georgia, pursuant to that certain Agreement and Plan of Merger dated April 27, 2015 by and between the Bank and NWGB. Pursuant to the Agreement and Plan of Merger, NWGB was merged with and into the Bank, with the Bank as the surviving entity. Prior to the acquisition, NWGB operated six banking locations in Georgia and Tennessee. The acquisition of NWGB allowed the Company to further its strategic initiatives by expanding its geographic footprint into certain markets of Georgia and Tennessee. The Company acquired NWGB in a $1,500 cash purchase.

The Company recorded a bargain purchase gain of $2,794 and a core deposit intangible asset of $4,931. The fair value of the core deposit intangible is being amortized on a straight-line basis over the estimated useful life, currently expected to be approximately 10 years.

In connection with the transaction, the Company incurred $606 in merger and conversion expenses during the three months ended March 31, 2016.