On Tuesday, the Nashville-based lender announced its acquisition of FNB Financial Corp., the parent company of Farmers National Bank of Scottsville. The deal gives the $6 billion bank its first presence in two Kentucky markets: Bowling Green and Scottsville, which are both roughly an hour north of Nashville.
The cash-and-stock deal is valued at $51.9 million.
The deal comes less than two months after FirstBank CEO Chris Holmes told analysts officials expected to announce their next bank deal by the end of the year. Since taking FirstBank public, Holmes hasn’t been coy about his desire to grow FirstBank’s footprint, emphasizing the bank’s desire to push into contiguous markets, including Southern Kentucky.
“Farmers National is a high quality community bank in a shrinking landscape of quality community banks, and we appreciate their faith in this combination with us,” Holmes said in a statement. “We continue to pursue similar opportunities and hope for additional successes in the coming months.”
Last year, FirstBank paid $38 million for 14 branches, many of which were in Knoxville and Chattanooga, from Atlanta-based Atlantic Capital Bancshares (Nasdaq: ACBI). In 2017, FirstBank spent $284.2 million to snap up two banks: Knoxville’s Clayton Bank and Trust and Tullahoma’s American City Bank.
At the end of June, Farmers National had $253 million in total assets, $204 million in total deposits and $178 million in total loans, according to a news release. That’s less than 5% of FirstBank’s size.
To be sure, 28% of those deposits are noninterest bearing, the release states. This means FirstBank will have access to a new base of stable, low-cost deposits, which are increasingly rare in Greater Nashville. Keeping deposit costs low is vital for community lenders to gain a bigger return on their loans.
Dan Harbison, CEO of Farmers National, will manage FirstBank’s Kentucky presence once the deal is finalized.