First Volunteer Corporation announced today it has reached an agreement to acquire Gateway Bancshares, Inc., the holding company for Gateway Bank & Trust, a community bank headquartered in Ringgold, with $267 million in assets.

Gateway Bank & Trust has three banking locations which are located on Alabama Highway in Ringgold, Battlefield Parkway in Fort Oglethorpe, and North Main Street in LaFayette.

The transaction, which is subject to shareholder and regulatory approvals, is expected to close during the first quarter of 2012.

“I’m excited about the opportunities this merger gives our company to serve the north Georgia market. Gateway Bank & Trust is a healthy bank with a strong franchise in a growing market,” said First Volunteer Corporation president and CEO Patti W. Steele.

“Gateway currently has 26% of the market share in Catoosa County, as well as a meaningful presence in Walker County. This acquisition provides increased banking convenience for Gateway customers, with five additional banking offices in Hamilton County (Tenn.),” said Steele.

First Volunteer anticipates a smooth and successful integration of Gateway Bank & Trust into the First Volunteer family in 2012.

“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.

“This transaction enables us to join forces with a strong and trusted bank that has long been a friendly competitor,” said Gateway Bancshares president & CEO Robert G. Peck. “The reality is that it is increasingly difficult for small banks to absorb the financial burden of more stringent regulatory requirements. And when you couple that with the uncertainty of the economic environment, you realize there is strength in numbers. Certainly this is a win-win arrangement for both Gateway Bank & Trust and First Volunteer Bank. We are very pleased to have this opportunity to work together to take care of customers.”

Gateway Bank & Trust opened in April 1997 and has grown from 17 employees to more than 70 employees. First Volunteer Corporation owns First Volunteer Bank, a $643 million bank headquartered in Chattanooga, with 225 employees and includes First Volunteer Insurance, a full-service insurance agency. First Volunteer has 22 banking offices in 9 counties throughout eastern and middle Tennessee. Alston & Bird LLP served as legal counsel to First Volunteer Corporation. Monroe Securities, Inc. acted as financial advisor and Bryan Cave LLP served as legal counsel to Gateway Bancshares, Inc.