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FirstBank To Expand Statewide With $284 Million Deal

FEBRUARY 08, 2017

As published in The Tennessean

The parent company of Nashville-based FirstBank has an agreement to acquire two banks in a roughly $284 million deal to boost its statewide presence.

It’s the latest mergers and acquisitions deal in as many months involving a Nashville-based bank. Last month, Pinnacle Financial Partners announced a roughly $1.9 billion merger deal with High Point, N.C.-based BNC Bancorp that will expand its footprint to North Carolina, South Carolina and Virginia.

Banking analyst Jeff Davis of Mercer Capital in Nashville expects 2017 to be a good year for bank mergers and acquisitions.

“M&A is back, but it’s a newish crop of small regional banks as buyers such as FirstBank and Pinnacle rather the large regionals such as BB&T and Regions (banks),” he said. “Key has been IPOs for some such as FirstBank in order to be able to offer sellers publicly traded shares that are liquid.  Higher bank stock prices help too because shares offered are worth more.”

Both Knoxville-based Clayton Bank and Trust and Tullahoma-based American City Bank, which FirstBank is buying, are controlled by entrepreneur Jim Clayton, who founded homebuilder Clayton Homes.

Upon closing the transaction in the third quarter, FirstBank will have roughly $4.5 billion in total assets.

“It really gives us a strong presence in the Knoxville market, but also these two banks are two of the most profitable banks in the state,” said FirstBank’s CEO Chris Holmes. “We’re also one of the most profitable banks in the state, so when you combine them it makes for really nice accretion for shareholders.”

Clayton Bank & Trust has $887 million of assets with branches across Knoxville, Jackson, Oakland, Covington, Henderson, Lexington, Friendship and Cookeville, Tenn. American City Bank has $308 million of assets and operates five branches in Tullahoma, Manchester, Lynchburg and Decherd, Tenn.

FirstBank is the third largest Tennessee-headquartered bank and has more than $3.2 billion in total assets. It has 45 full-service bank branches across the state, in North Alabama and North Georgia and a national mortgage business with offices across the Southeast.

Reach Getahn Ward at gward@tennessean.com or 615-726-5968 and on Twitter @getahn.

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