Jim McKenzie, Market President at First Bank on Manufacturer's Road, talks about expansion to control Atlantic Capital from his office.

For the second time in the past four years, FirstBank is expanding its footprint in the Chattanooga area by acquiring the branches of another bank.

FirstBank, a 113-year-old bank which has grown to become the third biggest bank based in Tennessee, expanded to Chattanooga in 2008 and took over the struggling Northwest Georgia Bank and its six offices in 2015. This spring, FirstBank plans to acquire the offices in East Tennessee and Northwest Georgia of Atlantic Capital Bank, which will add $600 million in deposits and $400 million in loans to FirstBank's portfolio in the region.

"When you are looking to expand, it doesn't get much more attractive that the state of Tennessee and Georgia, both of which are areas of great economic activity," said Chris Holmes, CEO of the Nashville-based FB Financial Corp., the parent company of FirstBank. "We just want to continue to expand in great communities and Chattanooga is an example of that."

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Chris Holmes (Contributed photo)

Atlantic Capital is selling its 14 offices acquired from its $160 million purchase of the former FSG Bank in 2015 after failing to achieve the hoped-for success in building a merchant-oriented bank in the region. FirstBank will pay a deposit premium of 6.25 percent of the balance of the assumed deposits, but the purchase is expected to total only about a fourth of the amount Atlantic Capital paid for the operations four years ago.

"We have decided to pursue a strategy focused on our commercial banking opportunities in Atlanta and our other national commercial lines of business," Atlantic Capital Bank President Doug Williams said last year when the deal was announced. "We believe that our refined strategy focused on the Atlanta market and our national commercial lines of business will ultimately enhance the value of our institution, and that this transaction will allow us to meaningfully improve our earnings per share."

As part of the sale, Atlantic Capital notified its Chattanooga customers this month that Atlantic Capital branches on Gunbarrel Road in East Brainerd, on Highway 153 in Hixson and in Warehouse Row downtown will close April 5 as FirstBank consolidates overlapping branches in the Chattanooga area.

Holmes said the chance to buy the branches from Atlantic Capital Bank in the Knoxville, Morristown, Chattanooga and Dalton offered another opportunity to expand FirstBank's presence in the market, making FirstBank among the top 5 banks among the 27 banks operating in metro Chattanooga.

"This will get us to the No. 5 bank in Chattanooga, but frankly our goal is to be No. 1," Holmes said. "We look to be the strongest community bank in every market that we are in."

FirstBank has grown rapidly in the past five years through both internal growth and acquisitions, including its $284.2 million purchase in 2017 of the Knoxville-based Clayton Bank and American City Bank.

"Consolidation has been a factor throughout my career in banking and I think that will continue to be the case in 2019," Holmes said. "I think you'll continue to see fewer number of banks due to the increased cost of doing business today.

But even as one of the Tennessee's fastest growing banks, Holmes said FirstBank has worked to remain a community bank "with local bankers and local decision makers. That's been a strategy that has really worked for us."

But for all its growth and additional branches, FirstBank officials insist they are maintaining their community banking roots.

"In the South our roots run deep and that gives us the strength to keep branching out and reaching high," Holmes said. "FirstBank's history of success is grounded in our fresh approach to banking that is more local, more accessible and more empowering."

Jim McKenzie, the market president for FirstBank in Chattanooga, said FirstBank will operate six branches in Chattanooga and five in North Georgia following the merger.

"We're staying true to our community banking roots and continuing to focus on personal banking — banking the old fashion way," McKenzie said. "We don't ever want to be a "1-800" bank because we continue to believe that personal relationships and personalized service in banking is what sets you apart."

McKenzie said FirstBank provides retail, commercial, corporate, mortgage and private banking services and lending to serve a variety of customers and financial needs.

"Our bankers are engaged and active in our community and from that involvement we believe we build the kind of relationships and community knowledge to be successful," McKenzie said. "We're small enough to know you by your first name, but large enough to handle just about any banking needs of any company in Chattanooga."

"We think the Chattanooga market is still fairly robust," McKenzie added. "A lot of people want to move here, work here and play here and those all create opportunities for us to grow."

Contact Dave Flessner at or 757-6340.