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Note 17 - Acquisition
 3 Months Ended
Mar. 31, 2021
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
Note
17.
Acquisition
 
On
February 18, 2021,
the Company entered into an agreement to acquire The Bank of Fincastle (Fincastle) for an aggregate purchase price of
$31.6
million in cash and stock (based on the Company's closing stock price as of
February 17, 2021).
The financial position and results of operations of Fincastle are
not
reflected in the Company's financial statements as of
March 31, 2021.
The transaction is expected to close in the
third
quarter of
2021,
subject to shareholder and regulatory approvals and other customary closing conditions. At the time of closing of the acquisition, The Bank of Fincastle is expected to have
six
retail bank offices operating in the greater Roanoke region of Virginia, including its main office in the Town of Fincastle. As of
March 31, 2021,
Fincastle reported assets of
$272.1
million, loans, net of allowance for loan losses, of
$197.8
 million, and deposits of
$239.7
 million.
 
In connection with the transaction, the Company expects to pay cash consideration of
$6.7
million and issue approximately
1.3
million shares of its common stock to the shareholders of Fincastle. Upon completion of the transaction, the Bank of Fincastle is expected to be merged with and into First Bank. The acquisition will be accounted for as a business combination under ASC
805,
Business Combinations
. Under acquisition accounting, assets acquired and liabilities assumed are recorded at their acquisition date fair values, and any excess of the purchase price over the aggregate fair value of the net assets acquired is recognized as goodwill.