Tennessee bank plans Gateway merger

Tennessee bank plans Gateway merger

January 18th, 2012 by Mike O'Neal in Local Regional News

It will be months before the signs change, but Ringgold-based Gateway Bank & Trust will soon become First Volunteer Bank.

First Volunteer Corp. announced last Friday an agreement to acquire Gateway Bancshares Inc., the holding company for Gateway Bank & Trust which has about $267 million in assets and about 70 employees.

"These are two healthy banks that are merging," said Gateway Bancshares President and CEO Bob Peck. "Customers should see no changes. The same people they were used to dealing with yesterday will be the same ones they deal with tomorrow."

First Volunteer Corp. owns First Volunteer Bank, a $643 million bank headquartered in Chattanooga, Tenn., with 225 employees, and First Volunteer Insurance, a full-service insurance agency.

Gateway has three branches - Ringgold, Fort Oglethorpe and LaFayette - in Northwest Georgia. First Volunteer has 22 banking offices in nine counties throughout East and Middle Tennessee.

The merger must be approved by shareholders and pass review by bank regulators before it becomes final. The process is expected to occur within the next few months and the transition to a unified company is expected to be complete by August, officials said.

At that point, all branches will carry the First Volunteer Bank name.

"I'm excited about the opportunities this merger gives our company to serve the North Georgia market," First Volunteer Corp. President and CEO Patti W. Steele said when the merger was announced. "Gateway Bank & Trust is a healthy bank with a strong franchise in a growing market."

With about 7,500 customers, Gateway has about 26 percent of the Catoosa County market share and has a strong presence in Walker County.

Gateway customers will have access to all First Volunteer branches in Tennessee, including five offices in Hamilton County, once the merger is finalized.

Mary Carpenter, vice president of marketing for Gateway Bank & Trust, said emotions, including her own, are running high among employees. One of the original 17 who started Gateway in 1997, she said she wants to think of the merger "as a new challenge" and hopes the two will mesh perfectly.

"From what I understand, the two companies have similar philosophies," Carpenter said. "We need to stay positive and focused on maintaining the level of services our customers have come to expect. The customer is the most important component of our business and if we don't have customers, we won't have a bank."

Peck and Carpenter agreed that from its founding nearly 14 years ago, Gateway has grown customers and assets by offering personal, award winning service.

Nothing should change during or following the merger, officials said.

"Your bankers at Gateway Bank & Trust will continue serving you with the same level of dedication and superior service for which they have become known," Steele said.

The crisis created by national and international banks that were deemed too big to fail has led to tightened regulations. Those changes apply not just to banking behemoths but to small town and regional banks as well.

With the introduction of new rules, an institution's size now matters more than before, Peck said.

"The reality is that it is increasingly difficult for small banks to absorb the financial burden of more stringent regulatory requirements," he said. "We had been looking at the banking environment for the past few years and the board felt it would become more and more difficult to meet regulations. We think this is good for both organizations, for the shareholders and for the customers."