Mergers and acquisitions

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Mergers and acquisitions

Note (2)—Mergers and acquisitions:

Clayton Bank and Trust and American City Bank

On July 31, 2017, the Bank completed its previously-announced merger with Clayton Bank and Trust (“CBT”) and American City Bank (“ACB” and together with CBT, the “Clayton Banks”), pursuant to the Stock Purchase Agreement with Clayton HC, Inc., a Tennessee Corporation (“Seller”) and James L. Clayton, the majority shareholder of Seller dated February 8, 2017 with a purchase price of approximately $236,484.  The Company issued 1,521,200 shares of common stock and paid approximately $184,200 to purchase all of the outstanding shares of the Clayton Banks.  At closing, the Clayton Banks merged with and into FirstBank, with FirstBank continuing as the surviving banking corporation. Substantially, all of the operations of the Clayton Banks will be included in Banking segment in future periods.

Prior to the determination of purchase accounting adjustments, as of June 30, 2017, the Clayton Banks had approximately $1,200,000 in assets, $1,100,000 in loans, $900,000in deposits, and 18 banking locations across Tennessee. The Company is finalizing the fair value of certain assets and liabilities as part of the acquisition and as such, purchase accounting is not yet complete.

In connection with the transaction, the Company incurred $767 and $1,254 in merger and conversion expenses during the three and six months ended June 30, 2017, respectively.

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$1,540 and $2,146 in merger and conversion expenses during the three and six months ended June 30, 2016, respectively.