Mergers and acquisitions:

Atlantic Capital Bank branch acquisition

On November 14, 2018, the Bank entered into a Purchase and Assumption Agreement (the "Purchase Agreement") to purchase 11 Tennessee and three Georgia branch locations (the "Branches") from Atlantic Capital Bank, N.A., a national banking association and a wholly owned subsidiary of Atlantic Capital Bancshares, Inc., a Georgia corporation (collectively, “Atlantic Capital”). On the terms and subject to conditions set forth in the Purchase Agreement, FirstBank has committed to assume approximately $602,000 in deposits, purchase approximately $381,000 in loans at 99.32% of book value, and pay a deposit premium of 6.25% based on the lower of the actual deposit balance at close or on the average closing deposit balance for the 30 days prior to close.

Upon consumation, the Branches will become FirstBank branches. As such, the Atlantic Capital branch acquistion will be accounted for under ASC 805, "Business Combinations." The Company incurred $401 in merger-related expenses during the year ended December 31, 2018 in connection with this transaction. The acquisition is expected to be completed in the second quarter of 2019. As of the date of this annual report, all regulatory approvals have been received.

Clayton Bank and Trust and American City Bank

On July 31, 2017, FirstBank merged with Clayton Bank and Trust (“CBT”) and American City Bank (“ACB” and together with CBT, the “Clayton Banks”), pursuant to the Stock Purchase Agreement by and among the Company, FirstBank, the Clayton Banks, Clayton HC, Inc., a Tennessee corporation and its majority shareholder, James L. Clayton, dated February 8, 2017, as amended on May 26, 2017, with a purchase price of $236,484. The Company issued 1,521,200 shares of common stock and paid cash of $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 entity.

Prior to the merger, the Clayton Banks operated 18 banking locations across Tennessee. The merger with the Clayton Banks has allowed the Company to further its strategic initiatives by expanding its geographic footprint in Knoxville and other Tennessee markets and accelerates the growth of the Company’s Banking segment.

Goodwill of $90,323 recorded in connection with the transaction resulted primarily from anticipated synergies arising from the combination of certain operational areas of the Clayton Banks and the Company as well as the purchase premium inherent to buying a complete and successful banking operation. Goodwill is included in the Banking segment as substantially all of the operations resulting from the Clayton Banks merger is included in the Banking segment.

In connection with the transaction, the Company incurred $1,193 and $19,034 in merger and conversion expenses during the years ended December 31, 2018 and 2017, respectively.

For income tax purposes, the merger with the Clayton Banks was treated as an asset purchase. As an asset purchase for income tax purposes, the value of assets and liabilities for the Clayton Banks are the same for both financial reporting and income tax purposes; therefore, no deferred taxes were recorded at the date of acquisition. Additionally, this treatment allows for the deductibility of the goodwill and core deposit intangible for income tax purposes over 15 years.

The Company accounted for the Clayton Banks transaction under the acquisition method under ASC Topic 805. Accordingly, the fair value of the assets acquired and liabilities assumed along with the resulting goodwill was recorded as of the date of the merger. The Company’s operating results include the operating results of the acquired assets and assumed liabilities of the Clayton Banks subsequent to the acquisition date.

As of December 31, 2017, the Company finalized its valuation of all assets acquired and liabilities assumed, resulting in no material changes to preliminary purchase accounting adjustments. The following tables present the final estimated fair value of net assets acquired as of the July 31, 2017 acquisition date and the consideration paid and an allocation of the purchase price to net assets acquired:



	As of July 31, 2017
	As Recorded by FB Financial Corporation⁽¹⁾
Assets
Cash and cash equivalents	$	49,059
Investment securities	59,493
FHLB stock	3,409
Loans	1,059,728
Allowance for loan losses	—
Premises and equipment	18,866
Other real estate owned	6,888
Intangibles, net	12,334
Other assets	5,978
Total assets	$	1,215,755
Liabilities
Interest-bearing deposits	$	670,054
Noninterest-bearing deposits	309,464
Borrowings	84,831
Accrued expenses and other liabilities	5,245
Total liabilities	1,069,594
Net assets acquired	$	146,161



Purchase price:
Equity consideration
Common stock issued	1,521,200
Price per share as of July 31, 2017	$	34.37
Total equity consideration			$	52,284
Cash consideration			184,200		⁽²⁾
Total consideration paid			$	236,484
Preliminary allocation of consideration paid:
Fair value of net assets acquired including identifiable intangible assets			$	146,161
Goodwill			90,323
Total consideration paid			$	236,484


(1)	Amounts include certain reclassifications of opening balances to conform to the Company’s presentation.


(2)	Amount was deposited into an interest-bearing deposit account with the Bank in the name of the Seller as of July, 31, 2017.

The following unaudited pro forma condensed consolidated financial information presents the results of operations for the years ended December 31, 2017 and 2016 as though the merger had been completed as of January 1, 2016. The unaudited estimated pro forma information combines the historical results of the Clayton Banks with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments including loan discount accretion, amortization of core deposit and other intangibles, and amortization of the discount on time deposits for the periods presented. The pro forma information is not indicative of what would have occurred had the acquisition taken place on January 1, 2016 and does not reflect any assumptions regarding cost-savings, revenue enhancements, provision for credit losses or asset dispositions. Actual revenues and earnings of the Clayton Banks since the merger date have not been disclosed as it is not practicable as the Clayton Banks were merged into the Company and separate financial information is not readily available.



	Year Ended December 31,
	2017		2016
Net interest income	$	192,633	$	171,383
Total revenues	$	336,404	$	322,045
Net income	$	75,659	$	64,608