FirstBank to buy Clayton banks in one of Tennessee's biggest intrastate bank mergers

FirstBank to buy Clayton banks in one of Tennessee's biggest intrastate bank mergers

February 8th, 2017 by Dave Flessner in Breaking News

In one of Tennessee's biggest intrastate bank mergers, the parent company of FirstBank announced today it is buying Clayton Bank and Trust in Knoxville and American City Bank in Tullahoma from from Clayton HC, Inc., for $284.2 million.

FB Financial, which was based in Nashville and operates 45 bank offices across Tennessee, North Alabama and North Georgia, is buying the two banks from Clayton HC Inc., a holding company owned by Knoxville billionaire Jim Clayton.

The purchase comes five months after FirstBank made its debut on the New York Stock Exchange and just 16 months after First Bank acquired Northwest Georgia Bank in Ringgold, Ga.

The latest purchase by FirstBank will be financed through 5.86 million shares of FirstBank stock, $60 million in subordinated debt and $79.5 million in cash.

"This strategic transaction will significantly expand our footprint in key metropolitan markets and enhance our community markets in Tennessee," Chris Holmes, CEO of FirstBank, said in a statement "We expect the addition of the Clayton Banks to be immediately accretive to our earnings per share in 2017."

FirstBank hopes to close the deal in this year's third quarter. The addition of Clyaton Bank and American City Bank will add more than $1.2 billion in total assets to FirstBank, which has grown to more than $3.2 billion through nine acquisitions of other banks in the region over the past three decades since nursing home millionaire Jim Ayers bought FirstBank in 1984.

"The Clayton Banks have a great team and are two of the most profitable banks in Tennessee," Holmes said. "They have a relationship-based customer service culture that blends well with our culture."

For his part, Clayton said the sale of his banks creates "an exceptional opportunity for our customers who will gain access to additional products, services and a broader branch network while being able to rely upon the same strong customer service that the Clayton Banks have provided them for many years."

"Our strong presence in key markets along with a highly skilled niche business line is a tremendous asset for FirstBank, who is committed to continued investment throughout our footprint," Clayton said.

FirstBank entered the Chattanooga market in 2008 when it opened a main office on Chestnut Street and a branch operation on Hamilton Place Boulevard. Seven years later, FirstBank acquired Northwest Georgia Bank to more than quadruple FirstBank's presence in the Chattanooga market in the fall of 2015.