Two processes govern diversification of bacterial genomes. While point mutations always increase population diversity, horizontal gene transfers act as a cohesive force at the population level. Currently, a detailed quantitative understanding of how these two opposing forces shape bacterial evolution at the level of individual genes, genomes, and populations is lacking. In a theoretical model, we identify two qualitatively distinct phases in the dynamics of genome evolution, characterized by the second eigenvalue of the Markov process describing evolution. In the {\it divergent} phase the cohesion due to recombination is not sufficient to overcome mutational drift. As a consequence both individual genes and the entire genomes within the same species keep diverging from each other in the course of evolution. At the population level, transient clusters of sub-populations are continuously formed and dissolved. In contrast, in the {\it metastable} phase, the recombination has the upper hand. In this phase, genomes of descendants of a pair of sister cells remain close to each other for long periods of time but eventually escape the pull of recombination and diverge indefinitely. The population of the entire species remains genetically cohesive and stable over time and does not fragment into sexually isolated sub-populations. Real bacterial examples are discussed as well.