some text
Chris Holmes, new president of FirstBank

Comparing the banks

Northwest Georgia Bank

Headquarters: Ringold, Ga.

Founded: 1904

Assets: $286 million

Equity capital: $6.03 million

Locations: Six offices in Ringgod, Fort Oglethorpe, Chattanooga, Hixson and Ooltewah

2014 income: Loss of $2.7 million

Local presence: 7th biggest bank in metro Chattanooga

Staff: 103, down from 132 the previous year


Headquarters: Nashville

Founded: 1906

Assets: $2.5 billion

2014 income: $33.6 million

Staff: 849 employees, up form 720 a year earlier

Local presence: Third biggest bank in Tennessee and 22d biggest in metro Chattanooga

One of Tennessee's biggest and fastest-growing banks will acquire Northwest Georgia Bank this month to become the sixth biggest bank in metropolitan Chattanooga.

FirstBank, the wholly owned subsidiary of First South Bancorp Inc. and third-largest Tennessee-headquartered bank, said Thursday it has received regulatory approval to buy the Ringgold, Ga.-based Northwest Georgia Bank. Chris Holmes, CEO of FirstBank, said he expects to complete the purchase later this month, although the FirstBank name won't go up on the six Northwest Georgia Bank offices until operations of the two banks are completely consolidated by next spring.

FirstBank entered the Chattanooga market in 2008 when it opened a main office on Chestnut Street and a branch operation on Hamilton Place Boulevard. The addition of Northwest Georgia Bank will more than quadruple FirstBank's presence in the Chattanooga market and increase the bank's overall asset size to more than $2.8 billion.

"We want to increase our presence in what we see as a very strong banking market in Chattanooga," Holmes said. "This acquisition will boost both our physical presence with more branches but will also bring many more customers and relationships into our bank to help us become a much bigger player in the market."

FirstBank, which began in 1906 in Lexington, Tenn., was bought in 1984 by nursing home developer and millionaire Jim Ayers. Since then, the bank was grown its assets from $14 million to more than $2.5 billion through organic growth and a series of eight acquisitions of other banks.

FirstBank opened a mortgage office in Chattanooga a decade ago and later added two bank branches in Chattanooga to gain more than $60 million in local assets.

In the immediate future, Northwest Georgia Bank will continue to operate under its own name "and customers won't see any differences, other than to be able to use more FirstBank branches," Holmes said.

But with a stronger and larger capital base, FirstBank will be able to begin to grow the Chattanooga and North Georgia bank again and benefit next year by operational savings from combining the Ringgold, Ga.-based bank with the larger FirstBank, which is headquartered in Nashville.

Northwest Georgia Bank, which began in Ringgold in 1904, expanded across the border into Tennessee nearly a decade ago shortly before the Great Recession hit and created major loan problems for many banks. Northwest Georgia has lost money since 2007, accumulating losses of nearly $47.4 million in the past seven years to erase most of the bank's capital, according to filings with the Federal Deposit Insurance Corp. The bank has operated under a consent order with regulators and been subject to heightened oversight for more than five years.

"We will bring the strength and financial wherewithal to really grow this bank again, and we see real opportunities for growth in this market," Holmes said. "The era of shrinking the bank is over."

Northwest Georgia assets swelled to more than $633 million in the first quarter of 2008. In the most recent FDIC filing as of June 30, 2015, Northwest Georgia assets were under $287 million.

Terms of the bank purchase were not disclosed.

Shareholders of the banks approved the sale earlier this year and last month the deal was OK'd by the Federal Deposit Insurance Corporation (FDIC), the Tennessee Department of Financial Institutions and the Georgia Department of Banking and Finance.

"Obtaining all required regulatory approvals is a major milestone towards completion of the merger," Holmes said. "Our banks' histories and cultures are so closely aligned that we believe the integration of the two banks will be rewarding and we're looking forward to continued success as we consummate the merger."

Contact Dave Flessner at or at 757-6340.