FVCBancorp buys minority stake in mortgage lender

FVCBancorp in Fairfax, Va., has bought a minority stake in Atlantic Coast Mortgage in Fairfax.

The $2 billion-asset company said in a press release Tuesday that it acquired a 28.7% ownership interest in the mortgage company. FVCBancorp did not disclose the price it paid.

The bank provides a warehouse lending facility to Atlantic Coast, including a construction-to-permanent financing line, and has developed portfolio mortgage products to diversify its current held-for-investment loan portfolio.

Atlantic Coast is a licensed mortgage lender that primarily originates 1-4 family residential mortgage loans and construction loans. The company, founded in 2011, is led by CEO Timur Tunador. The lender is licensed in 16 states.

“We are excited to partner with a leading mortgage originator who shares a common vision of community banking,” David Pijor, FVCBancorp’s chairman and CEO, said in the release.

“This partnership will allow us to provide competitive residential mortgage products to our customers, while increasing our financial opportunities and expanding our revenue mix," Pijor added.

FVCBancorp in July announced plans to merge with Blue Ridge Bankshares in Charlottesville, Va. The $307 million merger is expected to close by early 2021.

Cadence in Houston settles redlining claims

Cadence Bancorp. in Houston has agreed to pay a $3 million penalty and provide more than $4 million in loan subsidies to address claims of discrimination in its mortgage lending operation.

The Justice Department and the Office of the Comptroller of the Currency said in a Monday press release that the settlement closes a probe into the $18.7 billion-asset company lending practices.

Cadence agreed in April to sell to the the $24 billion-asset BancorpSouth in Tupelo, Miss.

Cadence disclosed earlier this month that the Justice Department had warned of an upcoming penalty tied to potential fair-housing lending violations around Houston.

The Justice Department had filed a lawsuit in the U.S. District Court for the Northern District of Georgia, alleging that Cadence had violated the Fair Housing Act and the Equal Credit Opportunity Act. The lawsuit claimed that the bank avoided predominantly Black and Hispanic neighborhoods between 2013 and 2017 “because of the race, color, and national origin of the people living in those neighborhoods.”

“There is no place for discrimination in the federal banking system,” acting Comptroller of the Currency Michael Hsu said in the release.

Paul Murphy Jr., Cadence’s chairman and CEO, said in a release that, while he believed the company had complied with fair-housing laws, he “recognized that the mortgage lending program was not where we wanted it to be” after buying Encore Bank in 2012.

“We subsequently developed and successfully implemented a coordinated set of efforts to sustainably increase our lending in majority-minority census tracts and minority neighborhoods in Houston,” Murphy said, adding that more than half of the company’s mortgage business has been directed toward minority neighborhoods in recent years.

Home Bancorp selling Mississippi branch to Delta Bank

Home Bancorp in Lafayette, La., has agreed to sell a branch in Vicksburg, Miss., to Delta Bank in Vidalia, La.

The $2.8 billion-asset Home said in a regulatory filing Monday that it will also sell $15.7 million in deposits and $2.3 million in loans. Home will receive a premium based on specified percentages of deposit and loan categories.

The deal is expected to close in January.

Home said it expects to report a pretax loss of $23,000, though the sale should lower annual noninterest expense by $378,000.

Cache Bank in Colo. to sell to Mountain Valley

Mountain Valley Bank in Walden, Colo., has agreed to buy Cache Bank & Trust in Greeley, Colo.

The $318 million-asset Mountain Valley said in a press release Friday that it will buy substantially all the $111 million-asset Cache’s deposits, loans and branches in Greeley and Fort Collins. Mountain Valley did not disclose the price it will pay.

The deal is expected to close in the fourth quarter.

Cache originally agreed to be sold to Elevations Credit Union in Boulder, Colo., in September 2019 but Colorado banking regulators blocked the deal.

“We are pleased to add these communities to our Mountain Valley Bank operations and we are excited to continue delivering the exceptional customer service the customers of Cache Bank & Trust have always received,” Wade Gebhardt, Mountain Valley’s president, said in the release.

“Our companies share the same belief that people are at the center of how we do business,” Gebhardt added. “The synergy of like beliefs paired with additional forms and delivery of services will be an added benefit to their customers.”

GLC Advisors and Lewis Roca Rothgerber Christie advised Mountain Valley. Spierer Woodward Corbalis Goldberg advised Cache.

MVB ups stake in tech firm with gaming industry focus

MVB Financial in Fairmont, W.Va., will increase its stake in Interchecks Technologies, a payment disbursement platform.

Interchecks, founded in 2016, has offices in Boca Raton, Fla., and Brooklyn, N.Y. The company has a focus on the gaming industry segments of online sports betting, daily fantasy sports and iGaming.

The $2.7 billion-asset MVB said in a press release Thursday that it will boost its stake to 16% by paying $4.2 million, based on the shares being exchanged and closing price of MVB stock on Wednesday.

MVB's release did not mention the size of its original investment, which it made in 2019.

MVB said it had also entered into a management contract where Interchecks CEO Dylan Massey and his team will manager the product development and rollout of GRAND, the bank’s digital account for gaming and crypto.

“Increasing our investment and deepening our relationship with Interchecks is an important financial and strategic objective,” Larry Mazza, MVB’s president and CEO, said in the release.

“Interchecks has achieved remarkable success over the past several years,” Mazza added. “Its pioneering payment disbursement technology is a natural fit with our focus on the gaming industry.”

Rhodium sweetens offer for Sunnyside Bancorp in N.Y.

Rhodium BA Holdings has increased the price it will pay for Sunnyside Bancorp in Irvington, N.Y.

The $99 million-asset Sunnyside disclosed in a regulatory filing Thursday that Rhodium increased the size of its offer by 8%, to $20.25 a share. Sunnyside also agreed to pay Rhodium a $1.5 million fee if it terminates the sale.

Rhodium also agreed to indemnify Sunnyside and its directors and officers for up to $1 million of out-of-pocket costs and expenses tied to litigation brought by “certain persons, including stockholders.”

Sunnyside originally agreed in March to sell to DLP Real Estate Capital in Saint Augustine, Fla., for $12.3 million. But Rhodium swooped in with a $14.9 million offer that Sunnyside agreed to in July. 

Kenneth Torsoe, an investor in Suffern, N.Y., attempted to disrupt the deal by announcing earlier this month that he was willing to pay $20 a share in cash, stating that it represented a 7% premium to Rhodium’s offer.

Finucane, Montag to leave Bank of America at yearend

Two veteran members of Bank of America’s executive team are stepping down at the end of this year.

The $3 trillion-asset company said in a press release Thursday that succession plans for Anne Finucane, its vice chairman, and Thomas Montag, chief operating officer and president of global banking and markets, will be announced in coming weeks. 

Finucane, who is responsible for strategic positioning, sustainable finance, ESG, capital deployment and public policy efforts, joined the Charlotte, N.C., company following its acquisition of FleetBoston.

Finucane will transition to a nonexecutive chairman role at Bank of America Europe and will move to a nonexecutive board member role on BofA Securities Europe. 

Finucane “has been a trusted advisor and invaluable partner for many years,” Brian Moynihan, the company’s chairman and CEO, said in the release.

“From her time as one of the few senior women executives in financial services to today, she has provided unparalleled strategic vision, helping to make banking more transparent, while serving as a tireless advocate for equality, sustainable energy, education and health care,” Moynihan added.

Montag joined the company in 2008 as part of the acquisition of Merrill Lynch. He is responsible for all of the businesses that serve companies and institutional investors. 

Finucane and Montag will join Bank of America's Global Advisory Council.

Montag “joined the company during one of the most challenging periods in financial services history and skillfully steered the business to be one of the few financial institutions that can help clients raise cash, move money, expand into new markets, and manage risk in every major market around the world,” Moynihan said.

"At the same time, he has been a champion and partner in our responsible growth operating model,” Moynihan added. “Nowhere was this more evident than during the pandemic when we provided billions of dollars in credit to commercial and corporate clients in the early days of the crisis and then helped them access permanent capital so they could continue to support the economy.”

Germantown Capital is latest Memphis bank to sell

Planters Holding in Indianola, Miss., will enter Tennessee with an agreement to buy Germantown Capital.

The $1.3 billion-asset Planters said in a press release Wednesday that it expects to complete the purchase of the parent of the $378 million-asset First Capital Bank in the fourth quarter. Planters did not disclose the price it will pay.

First Capital has one branch in the Memphis, Tenn., area, along with $320 million of deposits and $310 million of loans.

“We are very excited to announce our partnership with First Capital, and we look forward to our combined companies continuing to build upon the great community bank franchise First Capital has established,” Alan Hargett, Planters’ CEO, said in the release.

“We view Memphis as a vital growth market for our company, and First Capital’s commitment to serving its customers and the Memphis market makes them the perfect partner to expand our footprint in the area,” Hargett added.

Janney Montgomery Scott and Jones Walker advised Planters. Olsen Palmer and K&L Gates advised First Capital.

Several Memphis-area banks have agreed to be sold in recent months.

Orion Federal Credit Union agreed earlier this month to buy Financial Federal Bank. Liberty Financial Services in New Orleans announced plans in June to buy Tri-State Bank of Memphis.

New Hampshire group planning ag-focused mutual bank

A group in New Hampshire is looking to form the first new mutual in more than four decades.

Organizers of Walden Mutual Bank expect to submit a new bank application this summer in hopes of opening the depositor-owned financial institution next year, according to the proposed mutual’s website.

“We’re creating an online bank for everyone who eats, makes, grows cooks, or just loves our local food,” the group said on its website. The plan is to offer online savings accounts that directly support local food and agriculture.

“We’re lending to sustainable food innovators across New England and New York while creating savings accounts that directly support those ventures,” the group said. “We believe that food is more than just a product, when made sustainably, it has the ability to create a thriving economy, environment, community, and culture.”

The effort is being led by Charley Cummings, who created and led Walden Local, a sustainable meat startup.

The last mutual savings bank charter was issued to Volunteer Federal Savings Bank in Madisonville, Tenn., in January 1973, according to American Banker.

Berkshire in Boston has new chairman, adds director

Berkshire Hills Bancorp has a new chairman.

The $12.3 billion-asset company said in a Wednesday press release that Bill Dunlaevy retired from the board over the weekend. David Brunelle succeeded Dunlaevy as chairman as “part of a preestablished succession plan,” Berkshire said.

Brunelle, co-founder and managing director or North Pointe Wealth Management, had been vice chairman and chaired the audit committee. He joined the board in 2017.

Berkshire also said that Jeffrey Kip, CEO of Angi International, had joined the board. Kip, a former chief financial officer at Panera Bread, was appointed to the audit and compensation committees.

“It has been an honor to lead the … board over the last two years, working closely with the board and management team to improve our performance and affirm our commitment to purpose-driven, community-dedicated banking,” Dunlaevy said in the release.

The board changes come a day after Berkshire announced plans to sell its insurance business. The sale is part of a broader strategy by Berkshire to improve investor returns over the next three years.

Houston Rockets owner applies to buy Texas bank

The owner of the Houston Rockets has agreed to buy Chasewood Bank in Houston.

MergerCo, an entity owned by Tilman Fertitta, filed an application with the Federal Deposit Insurance Corp. and the Texas Department of Banking on Aug. 23 to buy the $114 million-asset bank.

Bob Tyer, the bank’s president and CEO, is expected to keep his posts, according to the Houston Business Chronicle.

Fertitta’s other businesses include Landry’s, Golden Nugget Casinos and Hotels and the Houston Rockets. Chasewood would operate separately from those ventures.

BOK Financial taps insider to handle specialized lending

BOK Financial in Tulsa, Okla., has promoted an executive to oversee all of its specialized lending businesses.

The $47 billion-asset company said in a press release Tuesday that Brad Vincent will be responsible for energy, commercial real estate, treasury services, commercial strategies, while remaining in charge of health care.

Vincent will also be responsible for TransFund, an ATM and debit card processor.

Vincent succeeded Stacy Kymes, the company’s chief operating officer. Kymes is set to become the company’s president and CEO when Steve Bradshaw retires in 2022.

Vincent “is an outstanding banker and proven leader; I am so pleased to welcome him to this new role,” Kymes said in the release. “We asked [Vincent] to create a new health care vertical in 2013. Since its inception, it has been one of the company’s fastest-growing segments.”

Berkshire Hills in Boston to sell insurance business

Berkshire Hills Bancorp in Boston has agreed to sell its insurance business to Brown & Brown in Daytona Beach, Fla.

The $12.3 billion-asset Berkshire said in a press release Tuesday that it will sell the assets and operations of Berkshire Insurance Group for $41.5 million. The deal is expected to close by the end of September.

The insurance business, formed in 2000, offers personal and commercial property-and-casualty insurance.

The sale is part of a broader strategy by Berkshire to improve investor returns over the next three years.

“This transaction allows us to simplify our operating model, repurpose valuable resources and redeploy capital to support core businesses and strategic initiatives that will enhance long term stakeholder value,” Nitin Mhatre, Berkshire’s CEO, said in the release.

Berkshire will record a net gain on sale of roughly 55 cents a share in the third quarter. The sale will also lower earnings per share in the second half of this year by 2 cents.

Brown & Brown has offered positions to existing employees of the insurance business. Through a partner relationship, Berkshire will continue to refer customers to Brown & Brown.

"While we readily acknowledge that the company is reducing fee income, which investors often prefer to spread income, we also recognize this was a subscale business with mediocre returns," Mark Fitzgibbon, an analyst at Piper Sandler, wrote in a client note.

"This transaction strikes us as quite logical," Fitzgibbon added.

RBC Capital Markets and Luse Gorman advised Berkshire.

Western Bankers Association cancels 2021 conference

The Western Bankers Association has cancelled the annual conference it was planning next month in Hawaii.

The event was scheduled to take place from Sept. 9 to Sept. 14 in Waimea. The association said in a statement on its website that it was “a difficult decision” to make.

“With the COVID situation in Hawaii rapidly getting worse, we regretfully will be cancelling our conference,” the statement said.

“With the social gathering restrictions tightening in the state of Hawaii, the hotel was very concerned that they would not be able to successfully accommodate us given the reconfigurations we would need to do for our meeting space and meal function locations,” the association added. “We are very disappointed we will not be able to host this event, but believe it is the best course of action to ensure the health and safety of everyone.”

Illinois credit union plans to acquire Tempo Bank

Scott Credit Union in Edwardsville, Ill., has agreed to buy Tempo Bank in Trenton, Ill. 

The $1.5 billion credit union said in a press release Friday that it plans to pay $14.3 million in cash for the $92.9 million-asset Tempo. The deal is expected to close in the second quarter of 2022.

Tempo has two branches that serve about 5,000 customers. Scott Credit Union has 20 locations.

“We are excited for the opportunity to partner with Tempo … and to improve access to our service in Clinton County,” Frank Padak, the credit union’s president and CEO, said in the release. 

Tempo “is a well-managed bank, and we believe its robust mortgage lending portfolio will be beneficial to the credit union as we continue making strides for our goal of long-term growth,” Padak added.

Robert Stroh Jr. chairman, CEO and chief financial officer of Tempo Bank, plans to retire after the deal closes. The credit union said it plans to offer him a consulting agreement.

Santander Consumer agrees to parent's buyout offer

Santander Consumer USA Holdings in Dallas has agreed to a deal that will bring it completely under the umbrella of majority shareholder Santander Holdings USA.

Santander Holdings will pay $2.5 billion, or $41.50 a share, in cash for the remaining 20% stake in the subprime auto lender. The premium is roughly double what Santander Holdings offered last month.

The deal is expected to close in the fourth quarter.

The offer price represents a premium of about 14% to Santander Consumer USA’s closing price on July 1, the day prior to the announcement of Santander Holdings’ initial buyout proposal.

Piper Sandler and Covington & Burling advised a special committee formed by Santander Consumer USA. Hughes Hubbard & Reed was legal counsel for Santander Consumer USA.

J.P. Morgan Securities and Wachtell, Lipton, Rosen & Katz advised Santander Holdings USA, which has complete ownership of other U.S. businesses, including a broker-dealer, a private bank and a retail bank.

Seacoast to cross $10B of assets with two acquisitions

Seacoast Banking Corp. of Florida in Stuart has agreed to buy Sabal Palm Bancorp in Sarasota, Fla., and Business Bank of Florida in Melbourne.

The $9.3 billion-asset Seacoast said in a press release Monday that it will enter Sarasota and expand its operations in Brevard County with the purchases.

Seacoast will pay $53.9 million in stock for the $412 million-asset Sabal Palm Bank, or a 167% premium to the seller’s tangible book value, and $28.4 million in stock for the $188 million-asset Florida Business Bank, or a 133% premium. 

The deals are expected to close in the first quarter of 2022. Sabal Palm Bank has three branches, $377 million of deposits and $272 million of loans. Business Bank of Florida has one branch, $166 million of deposits and $136 million of loans.

The selling banks “are two highly successful, local community banking franchises,” Charles Shaffer, Seacoast’s president and CEO, said in the release.

"Both institutions are customer-focused franchises with an outstanding reputation for service excellence and deep customer relationships in their markets,” Shaffer added. “We see great opportunity to complement their strengths with Seacoast’s innovation and breadth of offerings to grow our presence and expand our position in two very attractive Florida markets.”

The deals are expected to be 4% accretive to Seacoast’s 2023 earnings. It should take a little over a year to earn back the projected 0.4% dilution to Seacoast’s tangible book value.

Neil McCurry Jr., Sabal Palm Bancorp’s president and CEO, will become Seacoast’s Sarasota and Manatee County market president.

Seacoast plans to cut 40% of Sabal Palm Bank’s annual noninterest expenses and half of the annual operating costs at Business Bank of Florida.

Seacoast expects to lose $7.7 million in annual interchange income after crossing $10 billion of assets, beginning on July 1, 2023. The company also expects to take an annual $1.5 million his from higher Federal Deposit Insurance Corp. expenses and a lower Federal Reserve dividend. Earnings accretion from the acquisitions should offset 60% of those hits.

Piper Sandler and Alston & Bird advised Seacoast. Hovde Group advised Sabal Palm Bank and Business Bank of Florida. Smith Mackinnon advised Sabal Palm, while Porter Wright Morris & Arthur advised Business Bank of Florida.

First Bancshares in Miss. to switch to state charter

The First Bancshares in Hattiesburg, Miss., plans to switch from a national bank charter to a state bank charter.

The $5.5 billion-asset company disclosed in a regulatory filing Friday that its bank unit, The First, had filed an application with the Mississippi Department of Banking and Consumer Finance to convert to a state charter.

The First also filed a notice with the Office of the Comptroller of the Currency, its current primary federal regulator.

The bank plans to apply with the Federal Reserve Bank of Atlanta to remain a member bank of the Fed System. The Fed would become the bank's primary federal regulator.

The bank will change its name to The First Bank after the charter conversion is completed.

Proposed Ariz. de novo gets conditional FDIC approval

Organizers of Gainey Business Bank in Scottsdale, Ariz., have secured conditional approval from the Federal Deposit Insurance Corp.

The group must raise $15 million in initial capital before opening, according to the Aug 12 order.

Gainey's organizers received approval from the Arizona Department of Financial Institutions in 2018 to start raising capital. They applied with the FDIC in January.

Joe Stewart is expected to serve as the bank's president and CEO. He recently was the Arizona market president for Bankers Trust, and he was the chairman and CEO of JPMorgan Chase Arizona from 2007 to 2014.

The FDIC has granted conditional approval to eight de novo efforts in 2021. Five of those banks – Cypress Bank & Trust, Integrity Bank for Business, Climate First Bank, Genesis Bank and First Bank of Central Ohio – have opened.

Nine banks have opened this year. The others are FWBank, RockPoint Bank, Riverside Bank of Dublin and Square Financial Services.

Fairwinds Credit Union lines up Florida bank purchase

Fairwinds Credit Union in Orlando, Fla., has agreed to buy Citizens Bank of Florida in Oviedo.

The $3.9 billion-asset Fairwinds said in a press release Thursday that it plans to complete the purchase of the $489 million-asset Citizens in December. Fairwinds did not disclose the price it will pay.

Citizens Bank has six branches in central Florida. Fairwinds said it will hold nearly 10.3% of the deposits in Seminole County after the deal closes.

"We look forward to welcoming Citizens Bank of Florida customers as new members of Fairwinds,” Larry Tobin, the credit union’s president and CEO, said in the release.

“We believe they will find great value in our approach to providing exceptional personal service along with our products and programs designed to promote financial freedom and independence,” Tobin added. “They will have access to 31 additional branch locations throughout central Florida and a robust online and mobile banking platform.”

Fairwinds said its commercial loan portfolio would increase from $387 million to more than $600 million. 

Fairwinds bought the $95 million-asset Friends Bank in New Smyrna Beach, Fla., last year.

Citizens Bank was advised by Smith Mackinnon and Hovde Group. Fairwinds was advised by Shutts & Bowen and Skyway Capital Markets.

First Seacoast in N.H. inks wealth management deal

First Seacoast Bancorp in Dover, N.H., has agreed to buy a portfolio of wealth management accounts.

The $478 million-asset company disclosed in a regulatory filing Tuesday that its bank plans to buy accounts with about $26.3 million of assets under management from an unnamed investment advisory firm.

First Seacoast will pay $344,475 for the accounts, with $172,237 to be paid at closing and the rest when the accounts are successfully transferred.

First Seacoast said its FSB Wealth Management division had $66.8 million of assets under management on June 30.

Southern States in Alabama raises $16M from IPO

Southern States Bancshares in Anniston, Ala., raised $15.8 million from its initial public offering. 

The $1.5 billion-asset company said in a press release Monday that it sold more than 996,000 shares of its common stock at $19 a share. The stock has been listed under the symbol “SSBK.”

Certain shareholders sold roughly 1 million shares of stock as part of the IPO. Those shareholders included Patriot Financial Partners, EJF Sidecar Fund, EJF Small Financial Equities Fund III and Ithan Creek Investors USB, according Southern States’ prospectus.

Southern States said it expects to use the net proceeds from the shares it sold for general corporate purposes that include capital and liquidity to support growth and potential acquisitions.

The underwriters have a 30-day option to buy up to 300,000 additional shares of stock at the IPO price. If fully exercised, Southern States’ net proceeds would increase to about $21.1 million.

Keefe, Bruyette & Woods and Truist Securities were the joint book-running managers, while Hovde Group and Performance Trust Capital Partners were co-managers.

Former TCF exec joins Old Second's board

Old Second Bancorp in Aurora, Ill., has added a former executive at TCF Financial to its board.

The $3.3 billion-asset company said in a regulatory filing Tuesday that Dennis Klaeser had become a director. He also joined the board of Old Second National Bank.

Klaeser served as chief financial officer at TCF from August 2016 to April 2020. Before that, he was CFO at Talmer Bancorp when it was sold to Chemical Financial.

TCF was sold to Huntington Bancshares in June. Klaeser’s term is set to expire at the 2024 annual meeting.

Citizens State in Texas to buy neighboring bank

Citizens State Bank in Somerville, Texas, has agreed to buy Burton State Bank in Texas.

The $840 million-asset Citizens State said in a press release Monday that the deal for the $85 million-asset Burton State should close later this year. Citizens State did not disclose the price it will pay.

Burton State has one branch. Citizens State is “excited about the acquisition … and the opportunities for growth it will provide for their customers and employees,” Aaron Flencher, the bank’s president and CEO, said in the release.

The sale will allow Burton State’s employees to “spend more time focusing on the individual needs of our customers while also improving upon the products and services we currently offer,” Linda Blacklock, the bank’s president and CEO, said in the release.

Northeast Bank in Maine to leverage PPP relationships

Northeast Bank in Portland, Maine, is planning to ramp up efforts to offer traditional Small Business Administration loans to small businesses that participated in the Paycheck Protection Program.

The $2.2 billion-asset bank disclosed in a regulatory filing that it has reached a five-year agreement with United Operations and AmLoan to market 7(a) loans to PPP participants. United will provide the marketing and servicing, while Northeast will underwrite and fund any approved loans.

Northeast will share the cost of any marketing, referral and technology agreements.

The guaranteed portion of the loans would be sold, and Northeast would collect half of the premium from those sales. AmLoan will buy a 2% participation interest in the non-guaranteed portion. Northeast will bring in interest income from keeping the non-guaranteed portion.

Northeast agreed to pay United a servicing fee equal to $100 per loan, along with a 1% per annum on the outstanding balance of the guaranteed portion of the loan, minus the fixed fee.

Northeast “has a fairly extensive customer list from PPP, and therefore this program could have meaningful upside over time, especially with current gain-on-sale premiums,” Alexander Twerdahl, an analyst at Piper Sandler, wrote in a note to clients. “We see it as another low risk way to grow TBV and look forward to tracking its progress.”

Northeast has been acting as the correspondent bank for The Loan Source, a nonbank that has been aggressively buying PPP loans made by other lenders.

Twerdahl said that, based on Northeast’s PPP activity, the customer list could include more than 100,000 small business, though some opportunities might be curtailed by non-solicitation agreements.

New York Community enters blockchain partnership

New York Community Bancorp in Westbury is planning to work with Figure Technologies on a series of blockchain projects.

The $57.5 billion-asset New York Community said in a press release Monday that it expects to use Figure’s Provenance Blockchain to support financial inclusion, lower costs and complexity in its mortgage business and support a faster and less expensive payments system.

New York Community said it will make a direct equity investment in Figure as part of the arrangement.

“We chose Figure because of its focus on and knowledge of banking and payment systems,” Thomas Cangemi, New York Community’s chairman, president and CEO, said in the release. “Our agreement with Figure is a part of [our] strategic focus on the operational and cost benefits that blockchain technology can bring to bear across many areas of banking.”

New York Community and Figure also announced that they will invest in the JAM FINTOP Blockchain fund, which will invest in and develop blockchain infrastructure and businesses.

New York Community agreed in April to buy Flagstar Bancorp, which has a large mortgage business.

National Bank Holdings in Denver announced last week that it will also invest in Figure as part of an initiative to develop a number of blockchain projects.

Figure applied to the Office of the Comptroller of the Currency in November for a specialized charter. The San Francisco fintech plans to only hold uninsured deposits.

The application prompted the Conference of State Bank Supervisors to file a lawsuit in the U.S. District for the District of Columbia, claiming Figure is basically trying to secure a fintech charter while asserting that the National Bank Act doesn't allow the OCC to create one.

Senate bill would expand SBLC program to add fintechs

Sens. John Hickenlooper, D-Colo., and Sens. Tim Scott, R-SC, have introduced a bill that would lift the moratorium on issuing new Small Business Lending Company licenses and allow fintechs to participate in the Small Business Administration’s 7(a) program.

Fintechs were given their first access to SBA lending as part of the Paycheck Protection Program.

"Our bipartisan bill will modernize the SBA’s primary loan program to help underserved small businesses grow and thrive,” Hickenlooper said in a Friday press release.

The SBLC program currently has 14 licenses.

In addition to removing the moratorium on new SBLC licenses, the bill would reappropriate unused COVID funds from various stimulus bills to be used by the SBA to provide oversight of new SBLCs and would include reporting requirements to gauge the success of the program.

The bill includes a rule of construction that would bar the SBA administrator from becoming the primary regulator of fintechs and require the administrator to check for financial soundness and compliance when considering new program applicants.

Amalgamated in N.Y. adds former banker to board

Amalgamated Financial in New York has added a former banker to its board.

The $6.6 billion-asset company said in a press release that Darrell Jackson is its newest director. Jackson is president and CEO of The Efficace Group, an executive coaching business.

“We are thrilled to welcome Darrell as a valuable member of our team,” Lynne Fox, Amalgamated’s chairman, said in the release.

“We firmly believe that his demonstrated expertise and leadership across the financial sector, business acumen and successful strategies for growth despite challenging economic circumstances will be an incredible asset for our bank,” Fox added.

Jackson was a director of Chicago Shore and unit Delaware Place Bank from November 2016 to July 2018, when it was sold to Wintrust Financial. He was president and CEO of Seaway Bank and Trust from 2014 to 2015.

Jackson also held a variety of positions at Northern Trust from 1995 to 2014, including co-president of wealth management Illinois.

N.C. de novo raises more capital to back growth goals

Triad Business Bank, a Greensboro, N.C. de novo that opened last year, has raised $15 million in new capital.

The $267 million-asset bank said in a press release this week that it sold 1.5 million shares of stock on Aug. 3 for $10 each as part of an oversubscribed offering. A third of the shares were sold to the bank’s directors and executive officers.

Triad Business Bank raised $51 million in initial capital before opening.

The bank said the latest capital raise was 30 cents accretive to shareholders’ tangible book value.

“Triad Business Bank was formed with a vision to be a source of strength to the Triad’s business community,” CEO Ramsey Hamadi, said in the release.

“After two successful capital offerings … supported principally by private investors residing in the Triad, the bank is well positioned to deliver on this vision,” Hamadi said.

Following the close of the offering, the bank’s board and executive team beneficially own 23.5% of outstanding shares.

Proceeds will be used to support growth plans that include reaching $800 million of assets by the end of 2024.

Minnwest to buy Roundbank in Minnesota

Minnwest Bank in Redwood Falls, Minn., has agreed to buy Roundbank in Waseca, Minn.

The $2.4 billion-asset Minnwest said in a press release that it expects to complete the purchase of the $385 million-asset Roundbank by the end of this year. The bank did not disclose the price it will pay.

The proposed acquisition “represents an exciting opportunity for Minnwest to expand its geographic footprint and customer reach,” Doug Karsky, Minnwest’s president and CEO, said in the release.

Roundbank has four branches located in the Minnesota cities of Waseca, New Prague, Waldorf and Farmington. The bank was purchased from U.S. Bancorp predecessor First Bank System by the Erickson family, along with local directors and management, in 1987.

Minnwest has 32 branches in Minnesota and South Dakota.

GreenSky downplays impact of Truist ending loan pact

GreenSky in Atlanta said plans by Truist Financial in Charlotte, N.C., to end a loan origination agreement will not have a material impact on its profitability.

The point-of-sale lender disclosed in a regulatory filing Wednesday that it had received notice from the $522 billion-asset Truist a day earlier that the regional bank would terminate the agreement. The termination will be effective on Nov. 9.

Truist announced on Tuesday that it plans to buy Service Finance, a Boca Raton, Fla., company that makes home-improvement loans, for $2 billion. The deal is expected to close later this year.

GreenSky said in its filing that it has “significant unused funding commitments for future loan originations.”

GreenSky noted several initiatives it has pursued to diversify its funding model. It has turned to the asset-backed securitization market and has entered into a $1.5 billion purchase agreement with a global insurance company.

Truist originations have comprised about 8% of GreenSky’s total transaction volume in 2021. GreenSky said its unused bank partner commitments on June 30, excluding Truist, totaled $2.5 billion, including a relationship with a new, unnamed bank.

“Demand for GreenSky program consumer loans from multiple funding sources remains high, cost of funds across funding sources remain low, and GreenSky continues to be poised for strong profitability,” the filing said.

Lake Area Bank in Minn. to sell to Royal Credit Union

Royal Credit Union in Eau Claire, Wis., has agreed to buy Lake Area Bank in Lindstrom, Minn.

The $3.7 billion-asset credit union said in a press release Thursday that it expects to close the deal for the $500 million-asset Lake Area in the first quarter of 2022. Royal did not disclose the price it will pay.

“Royal is excited for the opportunity to bring our value proposition and commitment to making a positive impact in the lives we touch to expanded areas in Minnesota,” Brandon Riechers, the credit union’s president and CEO, said in the release.

Lake Area “is a family-owned financial institution that has served the community for over 100 years,” Riechers added. “Royal’s values-driven and relationship-based approach to financial management made this acquisition a good fit for our credit union.”

Royal bought Deerwood Bank and Capital Bank in 2016. It has a pending merger with Peoples Choice Credit Union.

Winthrop & Weinstine and Oakridge Financial Services Group advised Lake Area. Honigman and McQueen Financial Advisors advised Royal.

Tennessee credit union to buy Financial Federal Bank

Orion Federal Credit Union in Memphis, Tenn., has agreed to buy Financial Federal Bank in Memphis.

The $1 billion-asset credit union said in a press release Wednesday that it will pay cash for the $751 million-asset Financial Federal. Orion did not disclose the price it will pay.

“This transaction positions Orion to be a fierce competitor in the southeastern region in both the commercial and consumer banking spaces,” Andre Fowlkes, Orion’s chairman, said in the release.

“The partnership is a win for employees and the business community, and will position us to deliver on even greater community outreach activities throughout” Memphis, Fowlkes added.

We believe that the combination … produces undeniable synergies,” Ashley McAdams, Orion’s chief financial officer, said in the release. 

“Orion has a legacy of exceptional consumer banking, while Financial Federal has a specialized niche in the commercial banking space,” McAdams added. “Aligning these two organizations will bring depth and bench strength to Orion’s already well-established commercial real estate lending team while supporting Orion’s goal to grow our mortgage product lines and allow us to expand into commercial and industrial lending.”

Orion has more than 72,000 members. Financial Federal has a loan-production office in Nashville.

Orion was advised by Honigman. Financial Federal was advised by Janney Montgomery Scott and Baker, Donelson, Bearman, Caldwell & Berkowitz.

Provident in Mass. sets big goal for crypto-related income

Provident Bancorp in Amesbury, Mass., has set an ambitious goal for its dealings in crypto-related businesses.

The $1.6 billion-asset company disclosed in a recent presentation that it plans to bring in more than $1 million in fee income next year from cash vault services for Bitcoin ATMs, also known as BTMs.

Provident also shared in the presentation that it had about $95 million in crypto-related deposits on June 30, or nearly double what it had a quarter earlier. The company also had about $6 million of banking-as-a-service deposits at midyear.

A third of the crypto deposits are tied to exchanges, a quarter to institutional investors, and a fifth is related to BTMs, the presentation said.

Provident shared that, in the second quarter, it had only two active BTM customers, each with one vault location. The company said its projections include anticipated fees from five active customers with 37 vault locations awaiting activity.

Crypto-related deposits make up 7% of the company’s deposits, and 85% of the crypto-related deposits are noninterest bearing, Jeffrey Kitsis, an analyst at Piper Sandler, said in a note to clients.

"Based on the rapid growth that Signature Bank and Silvergate Capital have delivered in this space, we wouldn’t be surprised to see digital-asset deposits continue to move higher at a swift pace,” Kitsis added.

Truist to buy home-improvement lender for $2 billion

Truist Financial in Charlotte, N.C., has agreed to buy Service Finance, a Boca Raton, Fla., company that makes point-of-sale loans for home-improvement projects.

The $522 billion-asset Truist said in a press release Tuesday that it will pay $2 billion to Canadian-based ECN Capital for Service Finance. The deal is expected to close later this year.

Service Finance uses proprietary technology to deliver payment solutions to more than 14,000 home-improvement dealers and contractors. More than 80% of Service Finance's loan applications are completed on its mobile application.

The acquisition “expands the scale and capabilities of our wholesale payments businesses, enabling Truist to deliver innovative financing solutions to Service Finance's nationwide network of dealers and serve homeowners across the country," Mike Maguire, the company’s head of national consumer finance and payments, said in the release.

"This acquisition significantly strengthens Truist's leadership position in the rapidly growing POS industry,” Maguire added.

Service Finance’s originations are expected to exceed $2.5 billion this year. Truist has purchased more than $2 billion of loans from Service Finance since 2018.

Truist said it plans to hold “the vast majority” of Service Finance’s loans on its balance sheet. The company said it expects to earn a roughly 3% return on Service Finance's loans, adding that it should be able to reduce how much capital it holds against potential losses.

Mark Berch, Service Finance’s founder and president, will join the POS lending unit of Truist's national consumer finance and payments group.

The deal is the second in recent months where a regional bank agreed to buy a home-improvement lender. Regions Financial in Birmingham, Ala., agreed in June to buy EnerBank USA for $960 million.

Davis Polk & Wardwell and Truist Securities advised Truist. Cravath, Swain & Moore advised ECN Capital.

National Bank in Denver invests in blockchain fintech

National Bank Holdings in Denver has invested in a blockchain fintech firm as part of a broader effort to build a comprehensive digital platform. 

The $7.1 billion-asset company said in a press release Tuesday that it will work with Figure Technologies on a variety of blockchain-related initiatives. National Bank did not disclose the size of the investment or any specific initiatives.

National Bank said it is also finalizing an investment in Finastro Holdings Pty, a technology-based provider of digital working capital solutions.

National Bank did not disclose the size of either investment.

“Our vision is to create a digital financial ecosystem within a bank regulatory framework,” Tim Laney, National Bank’s CEO, said in the release. “We are collaborating with best-of-breed technology partners to deliver innovative and powerful solutions to solve problems for small and [midsize] businesses."

National Bank said it will continue to collaborate with strategic partners on digital products that provide greater access to credit, government-insured depository and treasury management solutions and integrated financial information with the added goal of lowering clients' transaction costs.

Figure applied to the Office of the Comptroller of the Currency in November for a specialized charter. The fintech plans to only hold uninsured deposits.

The application prompted the Conference of State Bank Supervisors to file a lawsuit in the U.S. District for the District of Columbia, claiming that Figure is basically trying to secure a fintech charter while asserting that the National Bank Act doesn’t allow the OCC to create one.

Simmons in Arkansas forms equipment-finance division

Simmons First National in Little Rock, Ark., has created an equipment finance division after hiring 11 commercial bankers.

The $23.4 billion-asset company said in a press release Tuesday that Lee Palm will serve as president of the new division. Palm previously served as president of commercial finance at TCF Financial.

Brian Shapiro, another former TCF banker, will serve as managing director in charge of Simmons’ transportation and marine business.

TCF was sold to Huntington Bancshares in June.

Phil Mulder joined Simmons as the unit’s head of credit and risk. He previously worked at Citizens Financial Group.

The division will largely focus on business aviation, OTR trucking, franchise finance, marine financing, and a specialized buy/sell desk function.

"Being able to add an entire team with the expertise and skillset that encompasses all of the business verticals necessary to begin operations represents a unique 'plug and play' opportunity that will allow us to immediately hit the ground running,” Matt Reddin, Simmons’ chief banking officer, said in the release.

“Equally important, we'll be able to offer our commercial finance customers a deeper banking relationship with access to our full array of complementary commercial banking and wealth management products and services,” Reddin added.

Simmons has announced a couple of acquisitions recently, agreeing in June to buy Triumph Bancshares in Memphis, Tenn., for $132 million and Landmark Community Bank in Collierville, Tenn., for $146 million. Those deals are expected to close in the fourth quarter.

Valley was one of seven bidders for Westchester Bank

Valley National Bancorp in New York had to raise its offer to strike a deal for Westchester Bank Holding in White Plains, N.Y. 

The $41.3 billion-asset Valley was the largest of seven bidders for the $1.3 billion-asset Westchester, according to a regulatory filing tied to the pending $210 million acquisition. Valley was coaxed to boost its offer by 6.5%, to $3,300 a share, to gain an exclusivity agreement. 

First, the details of the proposed combination, which is expected to close in the fourth quarter. 

The deal is expected to be about 1% accretive to Valley’s earnings and neutral to its tangible book value ratio.

Valley plans to cut about 30% of Westchester’s annual noninterest expenses. The company expects to incur $11 million of merger-related expenses.

Now for the background of the merger.

• The Westchester board decided during an April 13 meeting to hire an investment bank to evaluate its business plan and review strategic alternatives, including a possible sale.

• The investment bank, starting on May 5, contacted 16 financial institutions to gauge their interest in an acquisition. Thirteen expressed an interest and 11 executed nondisclosure agreements to gain access to the data room. Each agreed to a May 21 deadline for submitting nonbinding indications of interest.

• Westchester received seven indications of interest, including one from Valley.

• Valley, the largest financial institution, proposed an all-stock transaction with a purchase price of $3,100 a share. The highest indication of interest had a value of $3,300 a share.

• The investment bank contacted Valley on May 21 to see if it would be willing to increase the value of its proposal. Three days later, Valley raised its offer to $3,300 a share, contingent on a 30-day exclusivity period.

• Westchester’s board voted unanimously on May 24 to authorize management to execute Valley’s indication of interest, which included a 30-day exclusivity period. Westchester then began its due diligence of Valley.

• The first draft of the merger agreement was circulated on June 17.

• The Valley board voted unanimously to approve the merger agreement on June 28. The Westchester board unanimously approved the deal the next day and it was announced.

• John Tolomer, Westchester’s president and CEO, will become a market president for Valley under a two-year employment agreement that can be extended. He will receive a base salary of $550,000 and will be eligible to receive a target annual cash bonus equal to 45% of his base salary.

• Tolomer will receive a lump sum cash payment of $605,000 for agreeing to restrictive covenants, including two-year noncompete and non-solicitation provisions.

Orange County Bancorp in N.Y. raises $35M from IPO

Orange County Bancorp in Middletown, N.Y., raised $35.2 in net proceeds from its initial public offering.

The $1.9 billion-asset company said in a press release Monday that it sold nearly 1.2 million shares of common stock at $33.50 a share. About 150,000 shares were sold as part of the underwriters’ overallotment option.

The company said in a prospectus that net proceeds could be used to support growth in areas such as lending and wealth management and to financial strategic acquisitions, among other things.

Piper Sandler and Stephens were the joint book-running managers.

First Financial in Indiana to buy Hancock in Kentucky

First Financial in Terre Haute, Ind., has agreed to buy Hancock Bancorp in Hawesville, Ky.

The $4.8 billion-asset First Financial said in a press release Tuesday that it will pay $31.4 million in cash for the $334 million-asset parent of Hancock Bank & Trust. The deal is expected to close in the fourth quarter.

First Financial, which is expanding into western Kentucky, said it expects the deal to be about 7% accretive to earnings per share.

“We are excited to be joining forces with another bank that has deep roots in its community,” Norman Lowery, First Financial’s president and CEO, said in the release. “Together, our team of bankers will deliver unparalleled service to our customers and communities and continue to make those communities better places to live and work.”

Hancock has seven branches, $249 million of loans and $285 million of deposits.

Janney Montgomery Scott and SmithAmundsen advised First Financial. ProBank Austin and Frost Brown Todd advised Hancock.

First BanCorp in P.R. sells block of nonperforming loans

First BanCorp in San Juan, Puerto Rico, sold $52.5 million of nonperforming mortgages.

The $21.4 billion-asset company disclosed in a quarterly regulatory filing that it received an unsolicited offer to buy the loans, along with $2 million of related servicing rights.

First BanCorp said it received $31.5 million, or 58% of book value before reserves, for the loans and servicing rights. About $20.9 million of reserves are already applied to the assets sold, so the company said it realized an additional loss of $2.1 million following the sale. 

 “The corporation's primary goal with respect to this transaction is to accelerate the disposition of nonperforming assets,” the filing said. 

The sale lowered the amount of nonperforming mortgages at First BanCorp by 43%. 

First BanCorp said its ratio of nonperforming loans to total loans held for investment would have decreased from 1.6% to 1.15% had the sale taken place during the second quarter.

Columbia fast-tracked its first bank deal since 2017

It only took Columbia Banking System in Tacoma, Wash., three months to hammer out its first bank acquisition in more than three years. 

The $17.3 billion-asset company agreed in June to buy the $1.8 billion-asset Bank of Commerce Holdings in Sacramento, Calif., for $266 million. The acquisition will provide Columbia with its first branches in California. 

Before we dive into the background of the deal, here is an overview of the pending acquisition, which is expected to close in the fourth quarter. 

Columbia expects the deal to be 3% accretive to its 2022 earnings per share and 4% accretive the following year. The acquisition should be 0.3% accretive to Columbia’s tangible book value per share.

Columbia plans to cut 30% of Bank of Commerce’s annual noninterest expenses, or $10.6 million. The company expects to incur $19.1 million of merger-related expenses. 

Now, some key disclosures on how the deal came about, based on a recent regulatory filing: 

• Bank of Commerce hired an investment bank on Feb. 16 to advise on a potential sale or merger.

• The Bank of Commerce board on March 16 decided it would explore a combination with a larger financial institution. The company opted to wait until early April so it could confidentially provide first quarter results to interested parties that signed non-disclosure agreements. 

• The board selected six potential merger partners to contact, though it also asked its investment bank to contact “a few selected banks” in advance to arrange introductory meetings with President and CEO Randall Eslick.

• Eslick met with Clint Stein, Columbia’s president and CEO, on April 1. It was an informal meeting “focused on providing an update regarding publicly available information as to the financial condition, general business interests, and operating strategy” of Bank of Commerce.

• On April 13, the investment bank began contacting potential merger partners, including Columbia. Bank of Commerce and Columbia executed a non-disclosure agreement three days later.

• Bank of Commerce would receive three non-binding offers in early May.

• Columbia pitched an all-stock offer that valued Bank of Commerce at $17.85 a share and sought 60 days of exclusivity. The other proposals valued Bank of Commerce at $15.15 a share and $16.17 a share, respectively.

• Bank of Commerce chose to negotiate with Columbia under a 45-day exclusivity clause. A nonbinding indication of interest was signed on May 14. The management teams met on May 25. 

• The initial draft of the merger agreement circulated on June 4. Key items negotiated included certain representations and warranties to be provided by Bank of Commerce, certain restrictive covenants to be applicable to Bank of Commerce between signing and closing and the amount of transaction-related expenses Bank of Commerce could incur without impacting the exchange ratio. 

• Each company’s board unanimously approved the deal on June 23. It was announced the same day.

• Eslick will become president of Columbia’s Merchants Bank of Commerce division under a two-year contract that can be extended by 12 months. He will receive an annual salary of $490,000 and will be eligible for a bonus based on a target opportunity of 20% of his salary. He will also receive a one-time award of 6,000 restricted shares of stock that will fully vest at the end of two years. 

• Eslick will receive a lump-sum payment of roughly $1.9 million within 15 days of the deal’s completion to address his existing change-in-control agreement. 

• Eslick will have a one-year noncompete clause covering counties in which Merchants has a branch or office or has documented plans to establish a branch or office, and a one-year customer non-solicitation condition.

BTC entering new markets with Home Exchange deal

BTC Bank in Bethany, Mo., has agreed to buy Home Exchange Bank in Jamesport, Mo.

The $704 million-asset BTC said in a press release that it expects to complete the purchase of the $148 million-asset Home Exchange later this year. BTC did not disclose the price it will pay.

BTC will have 16 branches after the deal closes, including its first locations in Gilman City and Jamesport. 

“For 100 years, BTC Bank has been committed to helping individuals, families, businesses, and farmers thrive and be successful in our communities,” Doug Fish, the bank’s president and CEO, said in the release.

“We will take the necessary steps to ensure a smooth transition of service for our new customers while continuing our long-term commitment to providing exemplary service to all of the communities we serve,” Fish added.

Arbor-FNBH deal in Michigan back on track

Arbor Bancorp in Ann Arbor, Mich., has revived plans to buy FNBH Bancorp in Howell, Mich.

The $2.5 billion-asset Arbor said in a press release Monday that it will pay $116.5 million in cash for the $647 million-asset parent of First National Bank in Howell. The deal is expected to close by the end of this year.

The companies originally announced plans to merge in February 2020 but called it off in June in the midst of the coronavirus pandemic.

Arbor said on Monday that it expects the deal to be more than 15% accretive to its earnings per share. A year earlier, the company had projected 10% earnings accretion.

“We have been looking for strategic opportunities to expand Bank of Ann Arbor into Livingston County and believe we’ve found the perfect partnership with First National,” Tim Marshall, Arbor’s president and CEO, said in the release.

“By bringing together two high-performing and like-minded community banks that share a commitment to serving their local communities, we will continue to provide individuals and businesses with excellent service and a full range of financial services,” Marshall added.

Ron Long, First National’s president and CEO, will serve as Arbor’s district president for Livingston County.

Arbor was advised by Performance Trust Capital Partners and Bodman. FNBH was advised by Donnelly Penman & Partners and Varnum.