Six bidders made offers for North Carolina's Aquesta

Aquesta Financial Holdings in Cornelius, N.C., received offers from six bidders when it looked to sell itself earlier this year.

The $18.6 billion-asset United Community Banks in Blairsville, Ga., would walk away with the deal for the $752 million-asset Aquesta on May 27.

First, here’s a look at the financial details of the $131 million transaction, which is expected to close by the end of this year.

The cash-and-stock transaction values Aquesta at 216.8% of its tangible book value.

United said the deal should be accretive to its earnings per share by 6 cents to 9 cents in 2022, depending on the final mix of consideration. The company expects “manageable” dilution to its tangible book value.

United plans to cut 38% of Aquesta’s annual noninterest expense, or roughly $7.3 million. The company expects to incur $11.1 million of merger-related expenses.

Now for the highlights, per a regulatory filing tied to the proposed acquisition:

• Aquesta’s board decided during an October 2020 retreat that selling to a larger institution “might prove to be the best strategic option to enhance stockholder value.”

• Aquesta’s investment bank identified 31 potential buyers. Nineteen were contacted in the first half of March, and a dozen, including United, signed nondisclosure agreements to access confidential information.

• Six institutions, including United, submitted written nonbinding indications of interest by a March 30 deadline. The offers ranged from $16 to $21 a share. Four contenders were invited to conduct more due diligence.

• Each bidder was given an draft agreement and plan of merger on April 21, with a request that each mark up the document and submit their best offers by May 7.

• The second round of offers ranged from $19 to $21.25 a share. Aquesta took into account each bidder’s common stock, including price, trading volume, analyst estimates and dividend yield.

• The board determined that United’s bid – consisting of at least 70% stock, a fixed exchange ratio and a value of $21.25 a share – provided the best value for shareholders.

• On May 11, a suitor indicated it would raise its bid to $21.50 a share in cash and stock. After Aquesta pressed United and the other institution to submit their final and best offer, the other bidder increased its offer to $21.75 a share.

• United increased the stock portion of its bid and included $21.50 a share in cash.

• After analyzing both offers and each bidder, Aquesta entered into exclusive negotiations with United on May 12. A draft of the merger agreement was circulated soon after that.

• Aquesta on May 25 approved a deal with a total value of $21.28 a share. The agreement was executed on May 26 and announced the next day.

Freedom Bank in Virginia to form bank holding company

Freedom Bank in Fairfax, Va., plans to form a bank holding company.

The $837 million-asset bank said in a press release Thursday that it will apply to create Freedom Financial Holdings. Freedom said the board approved the move to “provide added financial and operational flexibility.”

Having a bank holding company would also broaden the bank’s ability to pursue nonbank activities.

“The formation of the new holding company will put the bank in the best position going forward to respond to evolving market conditions with more capital alternatives and will allow us to take advantage of future opportunities as they arise,” Joseph Thomas, Freedom’s president and CEO, said in the release.

TowneBank in Va. taps insider as next president

TowneBank in Suffolk, Va., has a new president.

The $15.8 billion-asset bank said in a press release Friday that Brad Schwartz had taken on the role, succeeding J. Morgan Davis. Schwartz will remain TowneBank’s chief operating officer.

Davis will remain CEO.

Schwartz was CEO of Monarch Bank when it was sold to TowneBank in 2016.

Schwartz “has played a significant role in the enhancement of our operational capabilities as well as his contribution to the more than doubling of our company’s assets and earnings,” G. Robert Aston Jr., TowneBank’s executive chairman, said in the release.

First Mid unveils two deals in the St. Louis area

First Mid Bancshares in Mattoon, Ill., has agreed to buy Delta Bancshares in St. Louis, along with a loan and deposit portfolio in the city.

The $5.8 billion-asset First Mid said in a press release Thursday that it will pay $15.2 million in cash and stock for the $697 million-asset Delta. The deal, which is expected to close in the fourth quarter, priced Delta at 141% of its tangible book value.

Delta has five branches, $484 million of loans and $546 million of deposits.

First Mid also agreed to buy $225 million of loans and $280 million of deposits from an unnamed financial institution. The acquisition, which will include four commercial lenders, is expected to close in September.

First Mid said it expected the deals to be 14% accretive to its 2022 earnings per share, excluding merger-related charges. It should take less than two years for First Mid to earn back an estimated 3% dilution to its tangible book value.

First Mid said it plans to cut about a third of Delta's annual noninterest expense. The company expects to incur $5 million of merger-related charges.

“The geographic synergies and financial metrics of these transactions are compelling and consistent with our strategy of deepening our presence in the attractive St. Louis market,” Joe Dively, First Mid’s chairman and CEO, said in the release.

“The proposed loan and deposit acquisition is similar to the one we completed in April of last year,” Dively added. “We reviewed nearly all the loans and have extensive knowledge with both the borrowers and the commercial lenders. I anticipate this being a smooth transition.”

Stephens and Schiff Hardin advised First Mid on the Delta transaction. Piper Sandler and Armstrong Teasdale advised Delta.

Finward making Chicago push with Royal acquisition

Finward Bancorp in Munster, Ind., has agreed to buy Royal Financial in Chicago.

The $1.6 billion-asset Finward said in a press release Thursday that it will pay $52.9 million in cash and stock for the $533 million-asset Royal. The deal, which is expected to close in the first quarter, priced Royal at 115% of its tangible book value.

Royal has nine branches, $460 million of loans and $466 million of deposits. Finward said it plans to close at least one of those branches.

“This partnership is a strong cultural, strategic, and financial fit for both of our organizations,” Benjamin Bochnowski, Finward’s president and CEO, said in the release. “By joining together, we expect to achieve more on a greater scale to help us serve our customers and communities better than ever before.”

Finward said it expects the deal to be 21% accretive to its 2022 earnings per share, excluding merger-related expenses. It will take a little more than two years for Finward to earn back an estimated 6.1% dilution to its tangible book value.

Finward expects to incur $7.7 million of merger-related charges. The company plans to cut 42% of Royal's annual noninterest expenses.

One Royal director or executive officer will join the Finward board.

Finward was advised by Stephens and Barnes & Thornburg. Royal was advised by Boenning & Scattergood and Howard & Howard Attorneys.

Community Trust in Kentucky taps next CEO

Community Trust Bancorp in Pikeville, Ky., will have a new CEO in 2022.

The $5.5 billion-asset company said in a press release Wednesday that Jean Hale, will retire as CEO on Feb. 7. Hale has been Community Trust’s CEO for the last 23 years.

Mark Gooch was named the company’s president, effective immediately, succeeding Hale. He will succeed Hale as CEO and as a director when she retires.

Gooch will remain president and CEO of Community Trust Bank, posts he has held since July 1999. 

Hale “leaves an indelible imprint on Community Trust … having provided strong leadership for its dynamic growth and profitability and assembling a strong executive management team during her tenure,” M. Lynn Parrish, the company’s lead independent director, said in the release.

Horizon to close branches in Indiana, Michigan

Horizon Bancorp in Michigan City, Ind., plans to close 10 branches.

The $6.1 billion-asset company said in a press release Tuesday that it will shutter nine locations in Indiana and one in Michigan. The closures are expected to take place on Aug. 27.

Horizon announced in May that it would buy 14 TCF National Bank branches in Michigan, along with $976 million of deposits and $278 million of loans. The company said it expects to close that transaction in the third quarter.

Citizens to buy Investors Bancorp in N.J. for $3.5B

Citizens Financial Group in Providence, R.I., has agreed to buy Investors Bancorp in Short Hills, N.J.

The $185.1 billion-asset Citizens said in a press release Wednesday that it will pay $3.5 billion in cash and stock for the $27 billion-asset Investors. The deal, which is expected to close by mid-2022, priced Investors at 130% of its tangible book value.

Investors has 154 branches, with 130 around New York City. It also has $22 billion of loans and $20 billion of deposits.

Citizens already has a pending purchase of branches from HSBC Holdings, while Investors is looking to buy eight branches from Berkshire Hills Bancorp.

The Investors acquisition “further strengthens our formidable franchise in the northeast, together adding roughly one million customers and boosting our near- and long-term growth potential,” Bruce Van Saun, Citizens’ chairman and CEO, said in the press release.

“We are confident in our ability to successfully integrate these acquisitions, and to over time deliver the same attractive offerings to customers and strong financial performance in the New York City metro region and New Jersey as we do in other major metro areas we serve,” Van Saun added.

Citizens said it expects the deal to be 6.4% accretive to its 2023 earnings per share. It should take a little more than two years for the company to earn back an estimated 2.6% dilution to its tangible book value per share.

Citizens plans to cut about 30% of Investors’ annual noninterest expenses, or $130 million. The company expects to incur $400 million of merger-related expenses. 

Kevin Cummings, Investors’ chairman and CEO, and Michele Siekerka, one of the company’s directors, are expected to join Citizens’ board.

Morgan Stanley and Sullivan & Cromwell advised Citizens. Keefe, Bruyette & Woods, Piper Sandler, Lazard and Luse Gorman advised Investors.

TriCo in Calif. lines up acquisition of Valley Republic

TriCo Bancshares in Chico, Calif., has agreed to buy Valley Republic Bancorp in Bakersfield, Calif.

The $8 billion-asset TriCo said in a press release Monday that it will pay $165.6 million in stock for the $1.4 billion parent of Valley Republic Bank. The deal, which is expected to close in the fourth quarter, priced Valley at 157% of its tangible book value.

Valley has four branches, $988 million of loans and $1.2 billion of deposits.

“We have great respect for the Valley franchise, its history of successful growth and its long-term commitment to its customers and local community,” Rick Smith, TriCo’s chairman, president and CEO, said in the release.

“We look forward to joining together to grow Tri Counties Bank into the leading community bank throughout the San Joaquin Valley,” Smith added.

Geraud Smith, Valley's president and CEO, will lead TriCo's operations in Fresno and Bakersfield. A Valley director will join TriCo’s board.

The deal is expected to be 5.5% accretive to TriCo’s 2022 earnings per share. It should take about two years for TriCo to earn back an estimated 1.6% dilution to its tangible book value per share.

TriCo plans to cut about 17% of Valley’s annual noninterest expenses. The company expects to incur $10.4 million in merger-related expenses.

TriCo was advised by Keefe, Bruyette & Woods and Sheppard, Mullin, Richter & Hampton. Valley was advised by Stephens and Duane Morris.

CVB Financial to buy Suncrest Bank in California

CVB Financial in Ontario, Calif., has agreed to buy Suncrest Bank in Visalia, Calif.

The $15 billion-asset CVB said in a press release Tuesday that it will pay $204 million in cash and stock for the $1.3 billion-asset Suncrest. The deal is expected to close by early 2022.

CVB said it expects the deal to be 3.5% accretive to its 2023 earnings per share, excluding merger-related expenses and assuming full realization of cost savings. CVB said it should take less than two years to earn back an estimated 0.8% dilution to its tangible book value per share.

Suncrest has seven branches, two loan-production officers, $900 million of loans and $1.2 billion of deposits.

The acquisition “will deliver important benefits to our combined customers through our increased presence in the Central Valley and expansion into Sacramento, a sizable and important new market … that presents significant growth opportunities,” David Brager, CVB’s CEO, said in the release.

Piper Sandler and Manatt, Phelps & Phillips advised CVB. MJC Partners and Sheppard, Mullin, Richter & Hampton advised Suncrest.

First Busey in Illinois to close 15 branches

First Busey in Champaign, Ill., plans to close 15 branches.

The $12.4 billion-asset company said in a press release Tuesday that it will close the locations in the fourth quarter.

The closures are designed “to ensure a balance between the company’s physical banking center network and its robust digital banking services,” the release said.

The move is expected to save First Busey $3.5 million annually. The company plans to incur $4.3 million to $5 million in one-time expenses in the third and fourth quarters tied to the closures.

Genesis Bank organizers raise enough capital to open

Organizers of Genesis Bank in Newport Beach, Calif., have raised enough capital to open their proposed de novo.

The group said in a press release Monday that it brought in $57 million in a capital raise led by Stephen Gordon of Gordon Ventures and Arkview Capital.

Gordon, who is set to serve as the bank’s chairman and CEO, is the former CEO of Opus Bank. Arkview, founded by Joon Chang, Pavel Chernyshov and Vijay Mehta, is a minority-certified private equity fund focused on investing in diversity-oriented businesses.

"I am excited for this opportunity to invest in the launching of a new commercial bank headquartered in and focused on serving the diverse business and commercial real estate needs of Southern California,” Gordon said.

“As the banking industry experiences ongoing consolidation and dislocation, the market serving diverse communities, small to midsize businesses, and owners, operators, and investors in income producing multifamily and commercial real estate, continues to grow, especially during this critical time when the economy… recovers from the pandemic-driven recession," Gordon added.

Genesis gained conditional approval from the Federal Deposit Insurance Corp. on Jan. 29. It was required to raise $53.3 million to open.

Piper Sandler and Holland & Knight advised Genesis, with Carpenter & Co. serving as a consultant. Greenberg Traurig advised Arkview.

MainStreet in Virginia adds former regulator to board

MainStreet Bancshares in Fairfax, Va., has added a former regulator to its board.

The $1.7 billion-asset company said in a press release that Rafael DeLeon has become one of its directors. 

DeLeon, a senior vice president of industry engagement for Ncontracts, recently retired as director for banking relations at the Office of the Comptroller of the Currency. At the OCC, he led and instructed the workshops for community bank directors and represented the agency at industry events.

Over 30 years at the OCC, DeLeon served as a national bank examiner, a consumer compliance specialist, a field office analyst and a safety and soundness field examiner.

“I’ve known Rafael for many years, and he brings a wealth of industry knowledge, strategic vision, and strong ethics and corporate governance to complement our already strong board as we strive to meet our community’s banking needs,” Jeff Dick, MainStreet’s chairman and CEO, said in the release.

First Western to buy Rocky Mountain Bank in Wyoming

First Western Financial in Denver has agreed to buy Teton Financial Services in Jackson, Wyo.

The $2 billion-asset First Western said in a press release that it will pay $47.8 million in cash and stock for the $420.7 million-asset parent of Rocky Mountain Bank. The deal is expected to close by early 2022.

Rocky Mountain Bank has 3 branches, $374.6 million of deposits and $267.9 million of loans. The bank has $394.1 million of assets under management.

“This transaction brings together two highly complementary institutions with similar values, business models, and commitment to helping clients achieve their financial goals,” Scott Wylie, First Western’s chairman, president and CEO, said in the release. 

“Expanding our presence in Wyoming is a key element of our long-term growth strategy given its attractive demographics and favorable environment for our unique approach to private banking,” Wylie added. “With our combined resources, we believe that we can steadily increase our market share in Wyoming in the future.”

The transaction is expected to be 5.2% accretive to First Western’s 2022 earnings per share. It should take about five months for the company to earn back the expected 0.4% dilution to its tangible book value.

First Western was advised by Keefe, Bruyette & Woods and Otteson Shapiro. Teton Financial was advised by Piper Sandler and Greenberg Traurig.

Bank of the Lowcountry in S.C. hires new CEO

Bank of the Lowcountry in Walterboro, S.C., has a new CEO.

The $269 million-asset bank said in a LinkedIn post on Friday that it had hired Marc Bogan.

Bogan previously served as president and CEO of Fauquier Bank in Warrenton, Va. The bank was sold to Virginia National Bancshares in Charlottesville earlier this year.

Prior to joining Fauquier, Bogan was president and chief operating officer of NewDominion Bank.

Bank of the Lowcountry was known as Bank of Walterboro until a 2019 rebranding.

HBT in Illinois sets timeline for branch closures

HBT Financial in Bloomington, Ill., is planning to close a number of branches.

The $4 billion-asset company said in a press release Monday that it closed a location in the second quarter, with five more closures set to take place by Sept. 30. The branches represented about 9.5% of its network. 

HBT said the closures will lead to $800,000 in pretax costs, largely tied to asset impairment and severance payments, with $104,000 recorded in the second quarter. The company said the moves should save $1.1 million annually. 

HBT's noninterest expenses fell slightly in the second quarter from a year earlier, to $1.4 million.

Net income was nearly double that of a year earlier, totaling $13.7 million. The quarter included a negative provision of $2.2 million.

Old Second set to double size with West Suburban deal

Old Second Bancorp in Aurora, Ill., has agreed to buy West Suburban Bancorp in Lombard, Ill. 

The $3.3 billion-asset Old Second said in a press release Monday that it will pay $297 million in cash and stock for the $3 billion-asset West Suburban. The deal, which is expected to close in the fourth quarter, priced West Suburban at 122% of its tangible book value. 

West Suburban has 43 branches, $1.5 billion of loans and $2.6 billion of deposits. 

“West Suburban is a franchise we have known and respected for a very long time,” James Eccher, Old Second’s president and CEO, said in the release.

“This combination is expected to significantly enhance our financial strength, our position in Chicago and our ability to invest in building the best bank for our customers and communities,” Eccher added. “From our perspective, we do not believe there is another partner who could deliver us the same level of complementary geographic reach, scale on current products and services, upside and long-term shareholder value.”

The deal is expected to be 38% accretive to Old Second’s earnings per share in the first year of combined operations. It should take about five years for Old Second to earn back an estimated 18% dilution to its tangible book value.

Old Second plans to cut 37% of West Suburban’s annual noninterest expenses. The company expects to incur $31 million in merger-related expenses.

Citigroup Global Markets and Nelson Mullins Riley & Scarborough advised Old Second. Keefe, Bruyette & Woods, Kirkland & Ellis and Barack Ferrazzano advised West Suburban.

Hanmi in Los Angeles gets 'needs to improve' CRA rating

Hanmi Financial in Los Angeles disclosed that its bank recently received a “needs to improve” rating tied to the Community Reinvestment Act.

The $6.4 billion-asset company said in a Friday regulatory filing that the rating, issued by the Federal Deposit Insurance Corp., covers the period between March 29, 2018 and May 3, 2021. 

The rating results in restrictions on certain types of expansion, including some acquisitions and the establishment and relocation of branches. The rating will also result in a loss of expedited processing of applications to undertake certain activities. 

The restrictions will remain in place at least until the bank’s next CRA rating is publicly released.

“We are disappointed with this rating given Hanmi Bank’s deep commitment to the diverse communities which we serve,” Bonnie Lee, the company’s president and CEO, said in the filing.

Hanmi “was founded to help underserved immigrant communities and we are proud of our strong track record of lending to, investing in, and serving low- and moderate-income communities, especially throughout the challenging pandemic period,” Lee added.

Lee said the bank is committed to improve the rating, adding that it had developed a “comprehensive plan to enhance our CRA effort.”

Heritage Financial in Wash. closing more branches

Heritage Financial in Olympia, Wash., is continuing to close branches.

The $7.1 billion-asset company said in a press release Friday that it will shutter four locations on Oct. 29.

The move will lower Heritage’s branch count to 49 locations, or a 21% decline from last fall.

Heritage’s noninterest expenses fell 1.8% in the second quarter from a year earlier, to $36.4 million. Occupancy and equipment expenses decreased by 5.6%, to $4.1 million.

Heritage’s net income rose by 29% from the first quarter, to $32.7 million. The company lost $6.1 million a year earlier after setting aside $28 million to cover potential loan problems tied to the coronavirus pandemic.

South State to buy Atlantic Capital for $542 million

South State in Winter Haven, Fla., has agreed to buy Atlantic Capital Bancshares in Atlanta.

The $40.4 billion-asset South State said in a press release Friday that it will pay $542 million in stock for the $3.8 billion-asset Atlantic Capital. The deal, which is expected to close in early 2022, priced Atlantic Capital at 161% of its tangible book value.

Atlantic Capital has two branches, $3.3 billion of deposits and $2.3 billion of loans. South State will have $5 billion of deposits in the Atlanta area when the deal closes.

"Atlanta is a strategically important market for us, and this attractive, in-market transaction significantly expands our market share in one of the fastest growing cities in the country,” John Corbett, South State’s CEO, said in the release. “Atlantic Capital provides a high-growth fintech and payments platform and a seasoned team of Atlanta bankers with a proven record of success.”

Doug Williams, Atlantic Capital’s president and CEO, will serve as president of South State’s Atlanta banking group and head of corporate banking. Two Atlantic Capital directors will join South State’s board.

The transaction is expected to be 3% accretive to South State’s earnings per share. It should take two years for South State to earn back any dilution to its tangible book value.

South State plans to cut a third of Atlantic Capital’s annual noninterest expenses. It expects to incur $37 million of merger-related expenses.

"We see South State as a logical acquirer for the Atlantic Capital business given its focus on building out diversified revenue streams," Stephen Scouten, an analyst at Piper Sandler, said in a client note.

"The main strategy behind the deal is to gain further density in the fast-growing Atlanta MSA, leverage Atlantic Capital's corporate banking experience, and capitalize on [the seller's] growing fintech and payments businesses," Scouten added.

Raymond James and Davis Polk & Wardwell advised South State. J.P. Morgan Securities, Sullivan & Cromwell and Troutman Pepper Hamilton Sanders advised Atlantic Capital.

Three banks disclose nearly $1 billion of PPP loan sales

A trio of banks has disclosed recent sales of Paycheck Protection Program loans.

Amerant Bancorp in Coral Gables, Fla.; Eagle Bancorp in Bethesda, Md.; and BancorpSouth Bank in Tupelo, Miss., said in separate press releases that they had sold a total of $990 million of PPP loans. They did not disclose the buyers.

The $7.5 billion-asset Amerant said it sold $95.1 million of PPP loans in May. An additional $59.9 million of loans were forgiven in the second quarter, leaving the company with $23.6 million of PPP outstanding on June 30.

Eagle sold $169.8 million of PPP loans during the second quarter, generating a roughly $4.7 million in accelerated net deferred fees and costs. The $11 billion-asset company said the loans were sold to “a well-regarded firm with significant expertise in the ongoing servicing and processing associated with PPP loans.”

Finally, BancorpSouth disclosed the sale of nearly 12,300 PPP loans totaling $725.4 million, which generated a $21.6 million gain on sale. The $27.6 billion-asset bank received $347.1 million in PPP forgiveness payments during the second quarter, leaving it with less than $170 million in PPP loans at June 30.

A number of other banks have disclosed PPP loan sales in recent weeks, including Trustmark in Jackson, Miss.; Blue RidgeBankshares in Charlottesville, Va.; and Dime Community Bancshares in Hauppauge, N.J.

Simmons-Landmark negotiations had fits and starts

Simmons First National in Pine Bluff, Ark., and Landmark Community Bank in Collierville, Tenn., tried on three occasions to work out a deal before announcing a $146.3 million merger in early June.

The $23.3 billion-asset Simmons walked away twice, according to a regulatory filing associated the with its proposed acquisition. We’ll look at the details after reviewing the key aspects of the planned merger.

The deal priced the $1 billion-asset Landmark at 143% of its tangible book value. It is expected to close in the fourth quarter. Simmons has a separate deal to buy Triumph Bancshares in Memphis, Tenn., for $131 million.

Simmons expects both deals to be 7.5% accretive to its 2022 earnings per share, excluding merger-related expenses. They should be slightly accretive to tangible book value.

Simmons plans to cut about 40% of the sellers’ combined annual noninterest expenses, while incurring $18.4 million of merger-related expenses.

Now a look at how Simmons-Landmark came together.

• Landmark initially put itself in play in 2018, reaching out to four financial institutions. Simmons was the only one to show an interest and sign a nondisclosure agreement.

• Simmons in March 2019 proposed an all-stock offer valued at $105 million. Landmark countered by asking for more stock and a small cash component to the consideration.

• Simmons ended talks in May 2019 “because it had other larger transactions it was pursuing.”

• Landmark met with a slate of new suitors over the rest of 2019. While a few signed nondisclosure agreements, none made an offer.

• Simmons reached out to Landmark in January 2020, eventually entering into a new nondisclosure agreement. Simmons on Feb. 15 proposed paying 4.3 million shares of stock and $10 million of cash for Landmark.

• The Landmark board approved the letter of intent, but Simmons withdrew it on March 4, “citing the concerns and uncertainty regarding the COVID-19 pandemic as the reason.”

• Simmons contacted Landmark again in January. Conversations proceeded using the nondisclosure agreement that had been signed a year earlier.

• Landmark received a proposal from Simmons on Feb. 12 valued at $130 million with all-cash or all-stock options. Landmark countered, seeking to add $15 million of cash to the stock proposal. Simmons was willing to add $7 million.

• Landmark’s board approved the letter of intent on Feb. 19. The first draft of the merger proposal was circulated in April.

• Landmark’s board approved the merger on May 25. Simmons directors signed off on the agreement on June. 4. The deal was announced on June 7.

CNB in Pennsylvania entering Virginia with new brand

CNB Financial in Clearfield, Penn., is set to enter Virginia.

The $5.1 billion-asset company said in a press release Tuesday that it will open a loan-production office in Roanoke, Va. CNB said the office, which will offer commercial loans, cash management services and private banking, will operate as Ridge View Bank.

The company operates under a variety of bank brands depending on the market. CNB Bank is in central and north central Pennsylvania.

ERIEBANK is the brand it uses in northwest Pennsylvania and northwest Ohio, while FCBank is its brand in Worthington, Ohio. BankOnBuffalo is used in northern New York.

Level One in Michigan taps insider as new president

Level One Bancorp in Farmington Hills, Mich., has a new president.

The $2.6 billion-asset company said in a press release Tuesday that it had promoted Timothy Mackay to the role. He succeeded Patrick Fehring, who will remain chairman and CEO.

Mackey, previously an executive vice president and consumer banking officer, also become president of Level One Bank.

Mackay has been responsible for the strategic leadership of the bank’s consumer banking division, including branches, small business banking, residential mortgages and marketing. Prior to joining Level One, he served in various leadership positions with Fifth Third Bank.

The promotion “will enhance our commitment to our customers as we move forward in executing our business plans,” Fehring said in the release.

“Tim has been working closely with the executive team since his arrival and I expect his transition into this role to be smooth,” Fehring added. “He is a strongly qualified leader who knows our company and the bank well.”

Hancock Whitney cuts 200 jobs, closing more branches

Hancock Whitney in New Orleans eliminated 200 jobs and will close 18 branches.

The $35.1 billion-asset company said in a press release Tuesday that the branches will close in October. Including 20 locations that were closed earlier in the year, Hancock has reduced its network by about 18% since the end of 2020.

The layoffs represented about 5.5% of the company’s workforce.

Hancock had previously cut 260 positions after offering a voluntary early retirement program. The company said the early retirement effort should save it $19 million annually.

Hancock reported second-quarter earnings of $88.7 million, or a 17% decline from a quarter earlier. The company lost $117.1 million a year earlier after boosting its loan-loss provision and shedding $497 million of energy loans

Cambridge Savings launches digital-only bank

Cambridge Savings Bank in Boston has created a digital-only bank.

The $5 billion-asset mutual bank said in a press release that it had created Ivy Bank to provide competitive rates for online savings accounts and CD, along with “human-centric customer support to help consumers work towards reaching their financial goals.”

The digital-only bank includes a money management tool that lets customers view all of their bank accounts in one place, including those at other financial institutions. New account openings take, on average, five minutes.

“Ivy was born out of our desire to meet customers where they are in this changing market environment and provide an opportunity for us to deliver a relationship-centric digital bank with the backing of our historic financial institution,” Wayne Petenaude, Cambridge Savings’ president and CEO, said in the release.

“We take great pride in helping our customers strengthen their financial well-being through our traditional distribution channels – and we are thrilled to be able to broadly extend that service model through the launch of our digital division,” he added.

Equity in Kansas to enter new market with branch deal

Equity Bancshares in Wichita, Kan., will enter the St. Joseph, Mo., market after buying three branches from Valley View Financial in Overland Park, Kan.

The $4.3 billion-asset Equity said in a press release Monday that it will also gain the assets and deposits associated with the branches. The deal is expected to close in December.

Equity did not disclose the price it will pay.

The branches had $71.9 million of deposits in mid-2020, or roughly 3.7% market share, based on data from the Federal Deposit Insurance Corp.

“We are pleased with the opportunity to offer Equity Bank products and services to customers in northwest Missouri, and St. Joseph is a great fit within our network,” Brad Elliott, Equity’s chairman and CEO, said in the release. 

“We have been able to grow loans, fee income and our core deposit base effectively in western Missouri with a focus on local community banking and we believe this approach will serve customers well in our new St. Joseph region,” Elliott added.

Equity agreed in May to buy American State Bancshares in Wichita for $73.6 million in a deal expected to close in early October.

Spencer Savings in N.J. to buy neighboring bank

Spencer Savings Bank in Elmwood Park, N.J., has agreed to buy Mariner’s Bank in Edgewater, N.J.

The $3.6 billion-asset Spencer said in a press release Friday that it will pay cash for the $414 million-asset Mariner’s. The deal is expected to close in the fourth quarter.

Mariner’s has six branches, $348 million of loans and $362 million of deposits.

The deal is expected to be nearly 30% accretive to Spencer's 2022 earnings.

“This opportunity brings together two community focused companies,” José Guerrero, Spencer’s chairman and CEO, said in the release. “It enhances our business banking initiatives and facilitates our expansion into northern and eastern Bergen County.”

Spencer was advised by Piper Sandler and Locke Lord. Mariner’s was advised by The Kafafian Group and Windels Marx Lane & Mittendorf.

LendingClub to pay $18M to settle FTC litigation

LendingClub will pay $18 million to settle a longstanding dispute with the Federal Trade Commission over allegedly hidden fees.

The San Francisco lender said in a press release Wednesday that the funds would be used for “consumer remediation.” LendingClub did not admit any liability as part of the settlement.

"While we have never agreed with the FTC's allegations, we appreciate the important role the FTC plays to protect consumers and are pleased to have reached an agreement that resolves the agency's concerns," Brandon Pace, LendingClub’s chief administrative officer, said in the release.

LendingClub also agreed to “clearly and conspicuously” disclose any origination fees borrowers must pay before getting a loan, according to the FTC.

“Companies that profit by preying on consumers don’t just harm the families they cheated – they also harm their competitors that play by the rules,” Samuel Levine, acting director of the FTC’s consumer protection bureau, said in a separate press release. “LendingClub fleeced consumers looking for a loan online, and will pay $18 million for its alleged misconduct.”

The FTC filed a lawsuit against LendingClub in 2018, claiming the company misled customers by advertising “no hidden fees” even though it charged some borrowers origination fees of $1,000 or more.

United in Ga. making big Tenn. push with Reliant deal

United Community Banks in Greenville, S.C., will enter central Tennessee with an agreement to buy Reliant Bancorp in Brentwood.

The $18.6 billion-asset United said in a press release Wednesday that it will pay $517 million in stock for the $3.1 billion-asset Reliant. The deal, which is expected to close in the first quarter, priced Reliant at 194.1% of its tangible book value.

Reliant, based just outside of Nashville, has 25 branches, $2.4 billion of loans and $2.6 billion of deposits.

United agreed in May to buy Aquesta Financial Holdings to bulk up around Charlotte, N.C.

“Partnering with Reliant is consistent with our strategy to expand into high-growth southeastern markets with companies that share our focus on employee experience, customer service, and community engagement,” Lynn Harton, United’s chairman and CEO, said in the release.

“We have had a strong interest in strengthening our Tennessee franchise for several years and are excited to enter the state’s best market,” Harton added. “This merger positions us well for future growth in the state.”

DeVan Ard Jr., Reliant’s chairman and CEO, will become United’s Tennessee state president.

The acquisition is expected to be 6.1% accretive to United’s 2022 earnings per share and 8.5% accretive the next year. It should take three years for United to earn back any dilution to its tangible book value.

United plans to cut about 31% of Reliant's annual noninterest expenses. The company expects to incur $34 million of merger-related expenses. 

"While there will likely be some additional risks working through the two deals, United does have a long history of M&A suggesting to us the associated risks should be manageable," Brett Rabatin, an analyst at Hovde Group, wrote in a note to clients. 

Rabatin said the pricing was "reasonable given the quality of the Reliant franchise."

D.A. Davidson, Morgan Stanley, Piper Sandler and Nelson Mullins Riley & Scarborough advised United. Raymond James, Credit Suisse Securities, and K&L Gates advised Reliant.

Blue Ridge, FVCB merger to create bigger Virginia bank

Blue Ridge Bankshares in Charlottesville, Va., has agreed to buy FVCBankcorp in Fairfax, Va.

The $3.2 billion-asset Blue Ridge said in a press release Wednesday that it will pay $306.6 million in stock for the $1.9 billion-asset parent of FVCbank. The deal is expected to close by the first quarter.

Blue Ridge shareholders will own 52.5% of the company when the deal closes. The company will be based in Fairfax.

“This partnership creates a powerful and innovative financial services provider better able to serve its clients and communities of today and tomorrow,” Brian Plum, Blue Ridge’s president and CEO, said in the release. 

“The team at FVCB has built and maintains a high-quality banking franchise, and there is no better team with which to unite to capitalize on the opportunities presented by an evolving industry," Plum added. 

Blue Ridge said the deal should be at least 16% accretive to its 2022 and 2023 earnings per share. It should take less than two years for the company to earn back a projected 5.7% dilution to its tangible book value.

David Pijor, FVCB’s chairman and CEO, will become executive chairman. Patricia Ferrick, FVCB’s president, will become president of the combined company and president and CEO of the bank.

Plum will remain CEO.

The 16-member board will have an even split of directors from Blue Ridge and FVCB. Pijor and Ferrick will join the combined board.

Blue Ridge plans to cut about 11% of the combined company’s annual noninterest expenses, excluding mortgage-related expenses. The company expects to incur $25 million of merger-related expenses.

Raymond James and Williams Mullen advised Blue Ridge. Piper Sandler and Troutman Pepper advised FVCB.

First Republic moves to co-CEO management structure

First Republic Bank in San Francisco now has two CEOs.

The $161 billion-asset bank said in a press release Monday that Hafize Gaye Erkan had become co-CEO, sharing responsibilities with Jim Herbert. First Republic also said it had renewed the contract for Herbert, who is also the bank’s chairman, through the end of next year.

Erkan will remain the bank’s president and a director.

“In extending and enhancing their collaboration, the board believes Jim and Gaye’s partnership is a strong combination that will continue to build on First Republic’s differentiated business model and exceptional service, delivering strong organic growth and shareholder return,” Reynold Levy, First Republic’s lead outside director, said in the release.

“Gaye has been a significant contributor to our performance as a company for seven years, and I look forward to the continuation of our successful partnership,” Herbert said.

“Her considerable financial services expertise has had a valuable and successful impact on the further development of our client-centric business model," Herbert added.

F.N.B. to buy Howard in Baltimore for $418M

F.N.B. Corp. in Pittsburgh has agreed to buy Howard Bancorp in Baltimore. 

The $38 billion-asset F.N.B. said in a press release Tuesday that it will pay $418 million in stock for the $2.6 billion-asset Howard. The deal, which is expected to close in early 2022, priced Howard at 160% of its tangible book value.

Howard, which entered Baltimore with the 2018 acquisition of 1st Mariner Bank, has 13 branches, $2 billion of deposits and $1.9 billion of loans. The acquisition will more than double F.N.B.'s deposits in Baltimore, to $3.5 billion.

“FNB and Howard share a deep cultural commitment to client and community service,” Vincent Delie Jr., F.N.B.’s chairman, president and CEO, said in the release. 

“Combined, we will have the sixth-largest deposit share in the Baltimore market, reinforcing our strong presence and presenting our organizations with the opportunity to deliver an enhanced experience for our customers, communities and dedicated teams," Delie added.

F.N.B. plans to cut about half of Howard's annual noninterest expenses. Nearly two-thirds of Howard's branches are within two miles of an F.N.B. location. The company expects to incur $32 million of merger-related expenses.

F.N.B. said it expects the merger to be 4% accretive to its earnings per share. The company said it should take about three years to earn back a projected 2% dilution to its tangible book value. 

"We were not surprised by this morning's announcement," Casey Orr Whitman, an analyst at Piper Sandler, wrote in a note to clients. 

"We believe that the premium afforded to Howard ... reflects sizable cost saves and the company's significant scarcity value as the largest local bank in Baltimore with a commercial focus and a formidable deposit base," Whitman added.

Morgan Stanley and Reed Smith advised FNB. Keefe, Bruyette & Woods and Nelson Mullins Riley & Scarborough advised Howard.

RBB Bancorp entering Hawaii with branch acquisition

RBB Bancorp in Los Angeles has agreed to buy a branch in Honolulu from Bank of the Orient.

The $3.7 billion-asset RBB said in a press release Monday that it will also gain $77.8 million of deposits and $10 million of performing loans.

RBB said the total consideration is $2.8 million. The deal is expected to close by Dec. 31.

“This transaction accelerates our goal of expanding our presence in vibrant Asian-American communities,” Alan Thian, RBB’s president and CEO, said in the release. “We are excited to enter this new market and bring our relationship-based banking model to Hawaii.”

"We are not surprised to see RBB enter Hawaii, as this has long been identified as a potential market of expansion and a logical fit with the company's business model," Nicholas Cucharale, an analyst at Piper Sandler, said in a client note.

"A one-branch deal strikes us as low-risk for the franchise with the possibility of increased scale over time," Cucharale added.

Janney Montgomery Scott and Loren P. Hansen advised RBB. Stephens and Morrison & Foerster advised Bank of the Orient.

Former TCF exec hired to lead S&T in Pennsylvania

S&T Bancorp in Indiana, Pa., will soon have a new leader.

The $9.3 billion-asset company said in a press release Monday that Christopher McComish will become its CEO on Aug. 23.

McComish will succeed David Antolik, who has been interim CEO since April. Antolik will remain the company’s president, a position he has held since January 2019.

Antolik filled in as interim CEO following Todd Brice's March 31 retirement.

McComish previously served as senior executive vice president of consumer banking at TCF Bank. Before that, he was president and CEO of Scottrade Bank.

“Following a comprehensive search process that considered internal and external candidates, the board concluded that Chris is the right leader for S&T,” Christine Toretti, S&T’s chairman, said in the release.

“We are delighted to welcome an experienced banker like Chris to S&T and thrilled that he will lead our company in its next era,” Christine Toretti, S&T’s chairman, said in the release.

Lakeland entering three N.J. counties with latest deal

Lakeland Bancorp in Oak Ridge, N.J., has agreed to buy 1st Constitution Bancorp in Cranbury, N.J.

The $7.8 billion-asset Lakeland said in a press release Monday that it will pay $244.4 million in stock for the $1.3 billion-asset 1^st Constitution. The deal, which is expected to close by early 2022, priced 1st Constitution at 157% of its tangible book value.

The acquisition will give Lakeland its first branches in New Jersey’s Mercer, Middlesex and Monmouth counties.

The acquisition “provides attractive financial attributes to shareholders of both Lakeland and 1st Constitution,” Thomas Shara, Lakeland’s president and CEO, said in the release. “This merger is consistent with our recent initiatives to expand into desirable markets.”

Robert Mangano, 1st Constitution’s president and CEO, will join Lakeland’s board.

The deal is expected to by 10.1% accretive to Lakeland’s earnings per share. It should take a little more than three years for Lakeland to earn back a projected 3.9% dilution to its tangible book value.

Lakeland said it plans to cut about 44% of 1st Constitution’s annual noninterest expenses, or roughly $18.2 million. The company expects to incur $18 million of merger-related expenses.

"The deal certainly makes sense strategically as [1st Constitution] represents one of the last good franchises of any size left in New Jersey," Frank Schiraldi, an analyst at Piper Sander, wrote in a note to clients.

"Bottom line, we like the deal strategically but look at it as a bit expensive and [we] do see some risk to the 10% accretion," Schiraldi added.

Keefe, Bruyette & Woods and Luse Gorman advised Lakeland. Raymond James and Day Pitney advised 1st Constitution.

BNY Mellon buying fintech that serves fund managers

Bank of New York Mellon in New York has agreed to buy Milestone Group, a company that provides fund management technology.

The $460 billion-asset BNY Mellon said in a press release Thursday that it expects to complete the acquisition in the second half of this year. The company did not disclose the price it will pay. 

BNY Mellon and Milestone formed an alliance more than a year ago to create a suite of oversight and contingent net asset value services for asset managers and other clients.

The acquisition “is the latest demonstration of BNY Mellon's commitment to support clients across the investment lifecycle and provide clients with open and flexible digital solutions that enable them to optimize, scale and grow their businesses," Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, said in the release.

"We gain both industry-leading technology as well as the expertise that Milestone is known for globally,” Regelman added. “This is a significant step in our continuous evolution — blending leading edge technologies and services to deliver greater efficiency and value for our clients."

Heritage Commerce discloses $4M legal settlement

Heritage Commerce in San Jose, Calif., has set aside $4 million to cover a legal settlement.

The $5 billion-asset company said in a regulatory filing Wednesday that the settlement addresses claims its bank was negligent in handling, supervising and managing depository accounts for DC Solar debtors and related investment funds. 

The settlement must be approved by the bankruptcy court.

Heritage Commerce said the settlement will run through noninterest expenses for the second quarter and that it will pursue reimbursement from its insurance carriers.

DC Solar filed for bankruptcy protection in February 2019. Heritage Commerce disclosed a month later that its bank had two unsecured commercial real estate loans, with a total balance of $3.3 million, to entities affiliated with the company.

United Bancorp. in Alabama announces CEO retirement

The CEO of United Bancorp. in Atmore, Ala., has retired.

The $949 million-asset company said in a press release Wednesday that Bob Jones, 69, also retired as president, effective July 2. He had been the company’s president and CEO since 1992.

David Swift, the company’s chairman, will serve as interim CEO. Mike Vincent, United’s chief credit officer, was named interim president.

Gwen Braden was named chief operating officer of United Bank, returning to a post she held from 2013 to January 2021. She had spent recent months serving as a consultant to the bank.

“This is a great time for United Bank especially because we have the opportunity to advance superb talent from within the company,” Swift said in the release.

North Carolina banking commissioner retires

Ray Grace has retired as North Carolina’s commissioner of banks.

Gov. Roy Cooper announced in a recent press release that he had appointed Katherine M.R. Bosken to serve as interim commissioner, pending approval from the state’s General Assembly.

Bosken, who joined the North Carolina Office of the Commissioner of Banks in 2013, previously served as an associate at Gebhardt & Smith in Baltimore.

Grace had been in charge of banking oversight in North Carolina since 2013. He joined the agency in 1974 as an examiner trainee.

Investor pushes Codorus Valley to consider selling

Codorus Valley Bancorp in York, Pa., is facing calls from an activist investor to find a buyer. 

Driver Management in New York said in a Tuesday regulatory filing that it wants the board of the $2.3 billion-asset Codorus Valley to “immediately hire a financial advisor and conduct a comprehensive review of all available options for increasing shareholder value, including a sale.”

Driver, which has a roughly 6.3% stake in Codorus Valley, said it wants to have a “full and frank discussion of the options available to the board and the [company] to increase shareholder value.”

The investor said it offered on June 29 to enter into a confidentiality and standstill agreement, as long as it was allowed to nominate candidates to run as directors during the company’s 2022 annual meeting.

Driver recently resolved a longstanding dispute with First United in Oakland, Md.

The $1.7 billion-asset First United disclosed in April that it would buy about 361,000 shares of its stock from Driver for $6.5 million. First United and Driver also agreed to a cooperative agreement, with the banking company paying the investor $3.3 million to settle outstanding litigation.

Driver agreed to back off a plan to nominate Abbott Cooper, a managing member, to stand for election to First United’s board at the company's next annual meeting. The investor also agreed to withdraw any other shareholder proposals, stop soliciting proxies and refrain from buying First United stock.

Select in N.C. discussed a merger with four banks

Select Bancorp in Dunn, N.C., decided early on to deal exclusively with First Bancorp in Southern Pines, N.C., according to a regulatory filing tied to their pending merger.

The companies announced a $314 million deal in early June. 

First, a review of the acquisition’s terms:

The deal, expected to close in the fourth quarter, priced the $1.8 billion-asset Select at 185% of its tangible book value. 

The $7.7 billion-asset First Bancorp said it expects the deal will be 10% accretive to its earnings per share. It should take First Bancorp about two years to earn back an expected 3% dilution to its tangible book value.

First Bancorp expects to incur $20 million of merger-related expenses. The company will look to cut about 45% of Select’s annual noninterest expenses. 

Here’s what we learned from First Bancorp’s recent regulatory filing:

• Select began the process of actively seeking a potential buyer in March.
• It contacted four potential merger partners in April, including First Bancorp.
• William Hedgepeth, Select’s president and CEO, and J. Gary Ciccone, the company's chairman, met with the president and CEO of one bank on April 3, discussing potential pricing and cultural fit.
• Hedgepeth and Ciccone met with Richard Moore, First Bancorp’s CEO, and Michael Mayer, the company’s president, on April 7. They discussed the potential advantages and pricing. “At the conclusion of the meeting, the participants agreed that the potential combination had merit.”
• First Bancorp on Aug. 8 asked to negotiate exclusively.
• The Select executives met with the management team of another bank on April 12. They discussed pricing and corporate cultural issues.
• First Bancorp and Select entered into a nondisclosure agreement on April 13 so they could conduct due diligent. Select entered into a similar agreement with another bank two days later.
• Hedgepeth met with the chairman and CEO of a fourth bank on April 28, covering potential pricing and cultural fit. After the meeting, Select “determined that the pricing of a potential transaction with First Bancorp was superior to the pricing indications received from” the other banks. 
• First Bancorp and Select entered into a 45-day exclusivity agreement on April 29.
• Executives from First Bancorp and Select met in-person on May 19. The filing never goes into the specifics of negotiations.
• Select’s board unanimously approved the merger on May 28. First Bancorp’s directors did the same on June 1. The merger was announced late on June 1.
• Hedgepeth is set to earn an annual base salary of $429,000 as an executive vice president of First Bank. He is also in line to receive a $100,000 bonus on his last day of employment and $700,000 for agreeing to certain non-compete and non-solicitation covenants. 
• Lynn Johnson, Select’s chief operating officer, will also join First Bank as an executive vice president and be paid $294,000 a year. She is in line for a $100,000 bonus on her last day of employment, along with $150,000 tied to non-compete and non-solicitation covenants.
• Hedgepeth and Johnson agreed to two-year consulting periods that begin after their employment ends. Hedgepeth will be paid $8,333 a month, or nearly $200,000. Johnson will receive $12,500 per month for the first year and $8,333 for the second year, or roughly $250,000.

First Bancorp in N.C. sells insurance business

First Bancorp in Southern Pines, N.C., has sold its insurance business. 

The $7.7 billion-asset company disclosed in a regulatory filing Friday that Bankers Insurance in Glen Allen, Va., bought "substantially all" of the operating assets and certain liabilities tied to First Bank Insurance Services. 

Bankers Insurance paid $13 million upfront. The deal includes a future earnout payment of up to $1 million.

First Bank's insurance business focused on property and casualty coverage. 

Bankers Insurance was formed by an association of community banks in 1999.

The sale "represents a good business opportunity for First Bank," Michael Mayer, the bank's president and CEO, said in the filing.

"Our customers will continue to benefit from an ongoing referral relationship with Bankers Insurance," Mayer added. "In addition, the capital provided from this transaction will further support First Bank's continuing loan growth an regulatory capital needs."

The Loan Source buys another block of PPP loans

The Loan Source has acquired more Paycheck Protection Program loans.

Blue Ridge Bankshares in Charlottesville, Va., disclosed in a regulatory filing Friday that it sold about $713 million of PPP loans to The Loan Source. 

Blue Ridge said it received about $706 million in cash proceeds for the loans. Blue Ridge said it used a portion of the proceeds to pay off roughly $431 million of borrowings under the Paycheck Protection Program Liquidity Facility.

Blue Ridge also said it expects to record a gain in the second quarter from the sale.

The bank still has about $140 million of PPP loans.

This is the third block of PPP loans that The Loan Source has bought in recent days. The company also bought $344 million of loans from Trustmark and $585 million of loans from Dime Community Bancshares.

CFBank in Ohio winding down DTC mortgage business

CF Bankshares in Columbus, Ohio, is winding down its direct-to-consumer mortgage business.

The $1.6 billion-asset parent of CFBank said in a press release Thursday that it had suspended the origination of new rate-lock commitments through the direct-to-consumer business, effective June 30. The bank will look to close out its existing loan pipeline and commitments in coming few months.

The company said its direct-to-consumer business will likely have a $2.5 million after-tax loss in the second quarter of 2021. 

CF Bankshares said the number of borrowers paying off loans in the first six months after origination has increased “significantly,” leading to a rise in early payoff fee expense. The company's early payoff fee expense for 2021 will likely exceed $2 million as of June 30.

The company also pointed to price volatility, along with “diminished refinance volumes, margin compression and increased market competition,” for its decision to shutter the business.

CF Bankshares started making direct-to-consumer mortgages in 2018.

The business “has been a significant driver of fee income … over the past two years, and the fee income generated from this business has allowed CFBank to invest in expanding its footprint and presence, along with building capital,” Timothy O’Dell, the company’s president and CEO, said in the release.

“Going forward, CFBank’s focus will continue to be on growing and expanding our core commercial and retail bank, along with retail mortgage lending,” he added. 

The direct-to-consumer business contributed about two-thirds of the company's revenue in 2020, Brendan Nosal, an analyst at Piper Sandler, wrote in a note to clients. 

"We suspect the ramifications will impact our EPS estimates, perhaps in a significant way," Nosal added. "At the very least, we can say this marks an abrupt, unexpected about face in strategy."