SmartFinancial to transfer Virginia branch to First Bank

SmartFinancial in Knoxville, Tenn., has sold a loan portfolio and other assets to First Bank in Strasburg, Va.

The $3.7 billion-asset SmartFinancial said in a press release Thursday that it will also transfer the lease to a branch in Richmond, Va., to First Bank in the fourth quarter. First Bank acquired $83 million of loans.

SmartFinancial said it would receive a premium based on a specific percentage of the loans sold. Fixed assets will be sold at book value. The branch’s employees will join First Bank. 

The company had gained the branch from its recent acquisition of Sevier County Bank.

“While we recognize the opportunity in the Richmond market area, we felt it necessary to focus on our Southeastern footprint and particularly the new markets we’ve added with our recent lift-outs”, Billy Carroll, SmartFinancial’s president and CEO, said in the release. 

“We have tremendous momentum with our recently announced team hires in [the Alabama communities of] Auburn, Dothan, Montgomery and Birmingham … and want to concentrate our expansion efforts there,” Carroll added.

SmartFinancial said in a separate press release that it had hired David Smith, a former banker at BBVA, to create a new floor plan lending business line. Smith will be based in Birmingham.

First Financial in Indiana to close nine branches

First Financial in Terre Haute, Ind., plans to close about 10% of its branches over the next two quarters.

The $4.8 billion-asset company said in a press release Thursday that it will shutter nine locations. It closed another branch earlier this year.

“Our customers are rapidly adopting our online banking platforms which provides us with an opportunity to consolidate these branches into other nearby locations while maintaining the high level of service our customers expect,” Norman Lowery, First Financial’s chairman, said in the release. 

The closures are expected to save First Financial $2.3 million a year. The company said it expects to incur $1.5 million in pretax charges tied to the effort. 

First Financial agreed in August to buy Hancock Bancorp in Hawesville, Ky., for $31.4 million. 

The company recently announced that it would merge its The Morris Plan Company of Terre Haute unit into First Financial Bank.

First Citizens, CIT extend deadline to close $2.2B merger

First Citizens BancShares in Raleigh, N.C., and CIT Group in New York have extended the deadline for their proposed merger from Oct. 15 to March 1.

The $55.2 billion-asset First Citizens said in a press release that it is still waiting on approval from the Federal Reserve. The Office of the North Carolina Commissioner of Banks and the Federal Deposit Insurance Corp. have already signed off on the proposed $2.2 billion deal. 

CIT has $54.7 billion of assets. 

First Citizens said both parties are committed to continuing to seek the Fed’s approval. Each company has responded to all questions from the Fed, though there is no timeline for approval. 

The proposed acquisition was announced in October 2020. At that, time, the companies said they expected to close the deal in the first half of this year.

BancPlus extending reach in New Orleans with deal

BancPlus in Ridgeland, Miss., has agreed to buy First Trust in New Orleans.

The $5.1 billion-asset BancPlus said in a press release Wednesday that it expects to complete the purchase of the $1.3 billion-asset First Trust in the first quarter. It did not disclose the price it will pay. 

First Trust has 14 branches, $1.2 billion of deposits and $1.1 billion of loans in Louisiana, Mississippi and Florida. 

“We are very excited about this partnership and the opportunity that it presents for our combined clients, team members, and shareholders,” Bill Ray, BankPlus’ president and CEO, said in the release. 

“We are committed to this region and we believe that combining two like-minded, community-focused banks will benefit our stakeholders and the region that we serve,” Ray added.

Keefe, Bruyette & Woods, Jones Walker and Covington & Burling advised BancPlus. Piper Sandler and Phelps Dunbar advised First Trust.

Southern Missouri Bancorp to enter St. Louis via deal

Southern Missouri Bancorp in Poplar Bluff, Mo., will enter the St. Louis market with an agreement to buy Fortune Financial in Arnold, Mo.

The $2.7 billion-asset Southern Missouri said in a press release Tuesday that it will pay $29.9 million for the $254 million-asset parent of FortuneBank. Southern Missouri will also assume about $7.5 million of subordinated debt. 

The deal is expected to close late in the first quarter. 

FortuneBank has $209 milion of loans and $215 million of deposits. 

The acquisition is "an important step in our long-term growth," Greg Steffens, Southern Missouri’s president and CEO, said in the release. "Fortune has developed a number of business lines that complement our organization well, and [it] provides a point of entry to a large and growing banking market where we believe our community banking model will perform well.” 

Daniel Jones, Fortune’s chairman and CEO, is expected to join Southern Missouri’s board.

Southern Missouri said it plans to cut about 30% of Fortune’s annual noninterest expenses.

Excluding merger charges, the transaction is expected to be 8.8% accretive to Southern Missouri’s earnings per share in the fiscal year that will end on June 30. It should take less than three years for Southern Missouri to earn back an estimated 3.8% dilution to its tangible book value. 

Piper Sandler and Armstrong Teasdale advised Fortune. Silver, Freedman, Taff & Tiernan advised Southern Missouri.

MainStreet in Va. taps exec to run new BaaS division

MainStreet Bancshares in Fairfax., Va., has promoted an insider to run its newly formed Banking as a Service division.

The $1.7 billion-asset company said in a press release Tuesday that Todd Youngren had become president of Avenu, a division of its bank that looks to provide services to fintechs.

Youngrens previously served as managing director for the fintech and payments banking group.

"This promotion recognizes Todd’s exceptional leadership in bringing our Banking as a Service solution to market,” Jeff Dick, MainStreet’s chairman and CEO, said in the release. “We designed Avenu to be a transformational solution for fintechs, and over the coming months Todd and his team will finish converting our vision into reality.”

“Mobile payment application providers perform high volumes of BaaS transactions and urgently need the support of knowledgeable banking partners,” Youngrens said in the release. “Avenu is harnessing the expertise we have amassed over years of serving these niche markets to create a single, streamlined solution.”

MainStreet said it plans to formally launch the new brand on Oct. 25.

First Financial in Indiana to merge bank subsidiaries

First Financial in Terre Haute, Ind., is planning to combine its two banking units.

The $4.8 billion-asset company said in a press release Monday that it will merge The Morris Plan Company of Terre Haute into First Financial Bank on Dec. 31. 

First Financial said the move will result in increased efficiencies, beginning in the first quarter.

Bank of Marin CEO to retire in October

Bank of Marin Bancorp in Novato, Calif., will have a new CEO in November.

The $4 billion-asset company said in a press release Friday that Tim Myers, its president and chief operating officer, will succeed Russell Colombo, who is retiring on Oct. 31. Myers will also join the company’s board.

Colombo has been CEO for 15 years. Myers joined Bank of Marin in 2007.

“With Russ at the helm, we benefited from both organic growth and four strategic acquisitions, expanding our footprint from two counties to 10 and increasing our branch network from nine locations in 2006 to 31 this year,” Brian Sobel, the company’s chairman, said in the release.

"The board would also like to extend our sincere appreciation for his selflessness in delaying his retirement to ensure management stability during the pandemic,” Sobel added.

The company announced two years ago that it had hired a search firm to find a successor for Columbo. It disclosed in July 2020 that Columbo "had committed to remaining on the job as long as needed."

Primis in Va. to sell minority stake in mortgage lender

Primis Financial in McLean, Va., has agreed to sell its minority stake in Southern Trust Mortgage.

The $3.4 billion-asset Primis said in a press release Thursday that it expects to record a pretax charge of $2.9 million in the third quarter tied to the sale. Primis also said it will not longer accrue earnings tied to the bank’s common membership interest in the mortgage lender. 

Southern Trust will buy the stake from Primis in a transaction that is expected to close in the fourth quarter. The mortgage lender will continue to be a borrower of the bank. 

Primis bought a 44% stake in the mortgage lender from Middleburg Bank in 2014.

HarborOne buying four Boston-area branch locations

HarborOne Bancorp in Brockton, Mass., has agreed to buy four branches in Massachusetts from Independent Bank in Rockland, Mass. 

The $4.6 billion-asset HarborOne said in a press release Thursday that it will buy the leases to branches that had belonged to East Boston Savings Bank, which Independent is set to buy later this year. 

HarborOne opened its first Boston-area office in 2018. It now has more than $370 million of loans and $100 million of deposits in the market. 

“These new branches will expand our greater Boston regional presence at a time of substantial market disruption caused by the sale of several community banks,” Joe Casey, HarborOne Bank’s president and chief operating officer, said in the release. 

“We believe our experienced neighborhood banking teams will be in a unique position to provide the personal, consultative banking services that we are known for, and customers will come to trust the overall banking experience that we deliver,” Casey added.

Valley National in N.Y. to buy Bank Leumi USA for $1.1B

Valley National Bancorp in New York has agreed to buy Bank Leumi USA in New York. 

The $41 billion-asset Valley said in a press release Thursday that it will pay Bank Leumi Le-Israel B.M. about $1.2 billion in cash and stock for the $8.4 billion-asset Bank Leumi. The deal, which is expected to close in the first quarter or early in the second quarter, priced Bank Leumi at 130% of its tangible book value.

Bank Leumi has $7.1 billion of deposits and $5.4 billion of loans. It has five commercial offices located in New York, Los Angeles, Chicago, Miami and Palo Alto, Calif. About a fifth of its revenue comes from noninterest income. 

“We are extremely excited about the combination with Bank Leumi and the diverse growth opportunities that we expect the partnership will bring,” Ira Robbins, Valley’s chairman, president and CEO, said in the release. 

“Bank Leumi’s unique deposit verticals, including the technology and venture capital business, will continue the significant funding improvement that we have driven over the last few years,” Robbins added. “On the lending side, Bank Leumi will add diversification into niche C&I segments and new geographies including in California and Illinois. We are also eager to scale Bank Leumi’s private banking platform across Valley’s larger customer base and footprint.” 

The deal is expected to be about 7% accretive to Valley’s 2023 earnings. It should take a year for Valley to earn back an estimated 1% dilution to its tangible book value.

Valley plans to cut about a third of Bank Leumi's annual noninterest expense. The company expects to incur $80 million of merger-related expenses.

Bank Leumi Le-Israel B.M. will own more than 14% of Valley’s common stock when the deal closes. Bank Leumi Le-Israel B.M. agreed to a four-year lock-up for those shares, with a quarter of the holdings being released from the lock-up on each anniversary of closing. 

Valley and Bank Leumi Le-Israel B.M. also entered into an ongoing business agreement that will include loan participations and customer referrals. 

Two Bank Leumi Le-Israel B.M. directors to Valley’s board, including Avner Mendelson, Bank Leumi’s president and CEO. Mendelson is expected to become Valley’s vice chairman.

The deal is the latest involving a foreign bank selling its U.S. operations.

Banco Bilbao Vizcaya Argentaria sold its U.S. bank to PNC Financial Services Group for $11.6 billion earlier this year. HSBC is planning to sell its U.S. retail operations to Citizens Financial Group in Providence, R.I., and Cathay General Bancorp in Los Angeles.

U.S. Bancorp agreed on Tuesday to buy MUFG Union Bank in San Francisco from Mitsubishi UFJ Financial Group for $8 billion.

Morgan Stanley and Wachtell, Lipton, Rosen & Katz advised Valley. Piper Sandler, Davis Polk & Wardwell and Meitar & Co. advised Leumi.

Florida de novo bank effort secures FDIC approval

Waterfall Bank, a de novo proposed for Clearwater, Fla., has secured conditional approval from the Federal Deposit Insurance Corp.

Organizers still need to raise $45 million before opening the bank, according to the FDIC’s Sept. 8 order.

The group behind Waterfall Bank applied with the FDIC in December. 

The bank would be based in the Waterfall Building, which is operated by Waterfall Capital Investments. The company “directs the deployment of capital for a small group of family offices” with a focus on real estate, hospitality, health care and private lending, according to its website. 

Waterfall Bank would operate independently of Waterfall Capital.

Kevin Darmody, the investment company's CEO, is set to become the proposed bank's president.

The FDIC has given conditional approval to nine proposed banks in 2021. Nine banks have opened this year.

Amalgamated in N.Y. entering Chicago with acquisition

Amalgamated Financial in New York will enter Chicago with an agreement to buy Amalgamated Bank.

The $6.6 billion-asset Amalgamated Financial said in a press release Wednesday that it will pay $98.1 million in cash, including an earnout of up to $1.1 million, for the $950 million-asset Amalgamated Bank. The deal is expected to close by the end of this year. 

The Chicago bank was formed in 1922. It has $836 million of deposits and $519 million of loans. 

“We are thrilled about joining forces with Amalgamated Bank of Chicago and bringing our shared commitment to socially responsible banking to serve customers in Chicago and the midwestern U.S.,” Priscilla Sims Brown, Amalgamated’s president and CEO, said in the release.

“This acquisition aligns with our disciplined strategy of pursuing accretive opportunities that allow us to expand geographically, strengthen our financial resources and increase our customer base while leveraging our unique expertise in operating as an ESG-driven bank,” she added.

Robert Wrobel, the Chicago bank’s chairman and CEO, and James Landenberger, its president, will serve as consultants to the combined company through the end of next year. 

Amalgamated Financial said it should take less than three years to earn back any dilution to its tangible book value. The deal should be 17.5% accretive to the company’s earnings per share. 

Amalgamated Financial said it expects to incur $18.1 million of merger-related expenses. It plans to cut about a quarter of Amalgamated Bank's annual noninterest expenses.

Keefe, Bruyette & Woods and Nelson Mullins Riley & Scarborough advised Amalgamated Financial. Piper Sandler and Hinshaw & Culbertson advised Amalgamated Bank.

Veritex in Dallas to buy ag lender North Avenue

Veritex Holdings in Dallas has agreed to buy North Avenue Capital in Ponte Vedra, Fla.

The $9.3 billion-asset Veritex said in a press release Tuesday that it will pay $57.5 million in cash for the government-guaranteed lender. Three years after the deal closes, North Avenue has the right, subject to adjustment, to receive another $5 million in cash, subject to certain performance measures.

The deal is expected to close in the fourth quarter. 

Veritex said the acquisition will make it a leading player in the Department of Agriculture’s Business and Industry lending program.

“We have been interested in expanding our existing presence in the USDA lending space for a while now and we have been impressed by what we have learned about North Avenue Capital and its people,” Malcolm Holland, Veritex’s chairman and CEO, said in the release. 

“This transaction provides us the opportunity to become the top player in the USDA B&I lending space,” Holland added. 

North Avenue will continue to operate under its name and brand after the deal closes.

The deal is expected to be 8.1% accretive to Veritex’s 2022 earnings per share. It should take a little more than three years for the company to earn back an estimated 4.3% dilution to its tangible book value. 

Veritex was advised by Keefe, Bruyette & Woods and Covington & Burling. North Avenue was advised by Harbor View Advisors and Womble Bond Dickinson.

Chase buys college financial-planning platform Frank

JPMorgan Chase in New York has acquired Frank, a college financial-planning platform. 

The $3.7 trillion-asset company said in a press release Tuesday that Frank serves more than five million students at more than 6,000 higher education institutions. It did not disclose the price it paid. 

“We want to build lifelong relationships with our customers,” Jennifer Piepszak, Chase’s co-head of consumer and community banking, said in the release. 

“Frank offers a unique opportunity for deeper engagement with students," Piepszak added. "Together, we’ll be able to expand our capabilities for students and their families, helping them financially prepare for college and other major moments in their future.”

Frank’s platform includes a streamlined FAFSA application process, advice to students appealing and negotiating financial aid packages, curated scholarships and ClassFinder, a marketplace of discounted college-level courses for transferable credit. 

The Frank brand will continue to be led by former CEO Charlie Javice, who was named Chase’s head of student solutions on the digital products team. Javice founded the platform in 2017.

'The Girl Banker' joins Citizens Bank of Edmond in impact role

Natalie Bartholomew has been named chief impact officer at Citizens Bank of Edmond in Oklahoma.

Bartholomew recently served as chief administrative officer at Grand Savings Bank in Grove, Okla. She is well-known in banking circles for creating The Girl Banker, a blog that promotes women leaders in the industry.

"Over the last 20 years of my banking career, I have found that I’m most passionate about my job when I know my work has a true impact,” Bartholomew said in a LinkedIn post. 

Bartholomew said in the post that she will work with the HR and marketing teams and collaborate on special projects in areas such as DEI, culture, and digital initiatives.

“I’m beyond thrilled to work alongside this innovative team remotely and in person,” she added.

German American makes bigger Ky. push with deal

German American Bancorp in Jasper, Ind., has agreed to buy Citizens Union Bancorp of Shelbyville in Kentucky.

The $5.3 billion-asset German American said in a press release Tuesday that it will pay $154 million in cash and stock for the $1.1 billion-asset Citizens Union. The deal, which is expected to close in the first quarter, priced Citizens Union at 155% of its tangible book value. 

The acquisition “represents another important, strategic opportunity for German American, and enhances our presence in the vibrant Louisville … metropolitan market area,” Mark Schroeder, German American’s chairman and CEO, said in the release. 

Citizens Union “has built a solid community banking franchise in each of the Kentucky markets they serve, giving German American an opportunity to provide our extensive offerings of banking, insurance and investment products and services,” Schroeder added. 

The deal is expected to be 14% accretive to German American’s earnings per share during the 12 months after it closes. It should take less than three years to earn back an estimated 3.2% dilution to German American’s tangible book value. 

German American plans to cut about 35% of Citizens Union’s annual noninterest expenses. The company expects to incur $19.3 million of merger-related expenses. 

David Bowling, Citizens Union’s CEO, will become a regional chairman at German American. Piper Sandler and Dentons Bingham Greenebaum advised German American. ProBank Austin a Frost Brown Todd advised Citizens Union.

U.S. Bancorp to buy MUFG Union Bank for $8 billion

U.S. Bancorp in Minneapolis has agreed to buy MUFG Union Bank in San Francisco.

The $559 billion-asset U.S. Bancorp said in a press release Tuesday that it will pay $8 billion in cash and stock to Mitsubishi UFJ Financial Group for the $133 billion-asset MUFG Union Bank. The deal, which is expected to close in the first half of 2022, priced MUFG Union Bank at 130% of its tangible book value.

Mitsubishi UFJ Financial Group will hold a roughly 2.9% stake in U.S. Bancorp when the deal closes.

The sale excludes MUFG Union Bank’s global corporate and investment bank, certain middle- and back-office functions and other assets. 

MUFG Union Bank has more than 1 million consumer customers, 190,000 small business customers, $58 billion of loans and $90 billion of deposits. 

The acquisition “underscores our commitment to strengthen and grow our business on the West Coast, make investments to serve customers and local communities and enhance competition in the financial services industry,” Andy Cecere, U.S. Bancorp’s chairman, president and CEO, said in the release. 

“With MUFG Union Bank, we will increase access to state-of-the-art financial products while maintaining U.S. Bank’s strong track record of putting its customers and communities first,” Cecere added. “We are also committed to maintaining both organizations’ excellent records of serving low-income communities and supporting minority-led institutions.” 

U.S. Bancorp said it would stay in every market that MUFG Union Bank currently serves in California, Washington and Oregon. It also plans to retain all of MUFG Union Bank’s front-line branch employees.

U.S. Bancorp said it expects the transaction to be 6% accretive to its 2023 earnings per share and 8% accretive when fully integrated. It should take less than two years to earn back an estimated 1% dilution to U.S. Bancorp's tangible book value. 

U.S. Bancorp plans to cut the combined company's annual noninterest expenses by about $900 million. The company expects to incur $1.2 billion of merger-related charges. 

The deal is the latest involving a foreign bank selling its U.S. operations. 

Banco Bilbao Vizcaya Argentaria sold its U.S. bank to PNC Financial Services Group for $11.6 billion earlier this year. HSBC is planning to sell its U.S. retail operations to Citizens Financial Group in Providence, R.I., and Cathay General Bancorp in Los Angeles.

MUFG Union Bank entered into a consent order with the Office of the Comptroller of the Currency on Sept. 20. U.S. Bancorp said it evaluated and incorporated the regulatory issue into all aspects of the deal process, including due diligence, integration planning and valuation. 

U.S. Bancorp has done business with MUFG Union Bank before, agreeing in January to buy its debt servicing and securities custody portfolio. That portfolio has about $320 billion of assets under management.

Goldman Sachs and Simpson Thacher & Bartlett advised U.S. Bancorp.

MUFG Union hit with consent order tied to IT oversight

MUFG Union Bank has entered into a consent order with the Office of the Comptroller of the Currency.

MUFG Americas Holding, the $133 billion-asset bank’s parent company, disclosed in a regulatory filing Monday that the Sept. 20 order is tied to “deficiencies in Union Bank’s technology and operational risk management.” 

MUFG Americas is part of Japan's Mitsubishi UFJ Financial Group. A recent report from Bloomberg News said that Mitsubishi UFJ Financial Group is reporting looking to sell Union Bank.

The bank neither admitted or denied wrongdoing as part of the order. The order did not impose any civil money penalty or fines. 

Union Bank must provide the OCC with written plans to improve reporting to its board and senior management on technology and operations risk. The bank must also improve the technology risk assessment process and timely and effectively implement its IT and operational risk governance frameworks and supporting programs. 

The bank is also required to improve policies, procedures, processes and internal controls within its “technology and operations environments, commensurate with the level of risk and complexity of [its] activities,” among other things. 

“Union Bank’s board … and management are committed to taking the necessary actions to fully address the provisions of the” order, the filing said. The order “finds that Union Bank has already begun corrective action and has committed resources to remediate the deficiencies identified.”

Alerus in N.D. taps CFO to be its next leader

Alerus Financial in Grand Forks, N.D., will have a new CEO in 2022.

The $3.2 billion-asset company said in a press release Monday that Katie Lorenson, its chief financial officer, will also become president on Jan. 1. She will also join the board. 

Lorenson will succeed Randy Newman, who will transition to the role of executive chairman.

“Katie is a proven leader and seasoned executive with a deep understanding and passion for our business,” Newman said in the release.

“Since Katie joined Alerus in 2017, she has been an indispensable strategic partner to me, our leadership team, and the board,” Newman added. “Katie brings relentless focus to executing our strategic plan and building our business, by attracting, retaining and developing employees and growing the company.”

Lorenson oversees Alerus’ business segments, including banking, retirement and benefit services, wealth management and mortgage. She also spearheaded the company’s 2019 initial public offering.

Prior to joining Alerus, Lorenson was CFO at MidWestOne Bank.

Newman joined Alerus in 1981, when it was known as First National Bank North Dakota. He become president in 1987 and CEO in 1995.

How the Citizens-Investors merger coalesced

Investors Bancorp in Short Hills, N.J., had “substantive negotiations” with another bank months before agreeing to be sold to Citizens Financial Group in Providence, R.I. 

The $27 billion-asset Investors agreed in July to sell to the $185 billion-asset Citizens for $3.5 billion.

Investors, however, held discussions with another bank in its market in early 2019, and again from January to April in 2020, about a deal, according to a regulatory filing tied to the Citizens merger. The other company terminated discussion, paving the way for talks with Citizens. 

First, here are the details of the Citizens-Investors deal: 

• The deal, which is expected to close by mid-2022, priced Investors at 130% of its tangible book value.

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

• Citizens plans to cut about 30% of Investors’ annual noninterest expenses, or $130 million. Citizens expects to incur about $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. 

Now for the key details revealed in the recent regulatory filing: 

• Investors’ management and the board felt the need to pursue a merger of equals, or a sale to a bigger bank, in 2019, citing the need for balance sheet growth, a flat yield curve and the need to invest in technology. 

• Informal conversations with a bank with operations in Investors’ region begain in April 2019.

• The talks became more substantive in July 2019 and there “were a number of discussion” from August 2019 to mid-March 2020. The companies paused their discussions when the coronavirus pandemic engulfed the United States. 

• The other company’s CEO contacted Cummings last January to resume talks. That company ended negotiations in mid-April, though the filing gave no reason for the decision.

• Bruce Van Saun, Citizens’ chairman and CEO, emailed Cummings in late April requesting a meeting. The meeting took place on May 5, and Van Saun expressed an interest in a deal. 

• Citizens and Investors signed a nondisclosure agreement on June 4, allowing each company to conduct due diligence. 

• Investors received an initial draft of the proposed merger agreement on July 8.

• On July 27, the companies agreed to an exchange ratio of 0.297 shares of Citizens stock and $1.46 in cash for each Investors share. Investors’ board unanimously approved the merger later that day. The deal was announced on July 28. 

• Cummings will receive $9.5 million for agreeing to a three-year non-competition and non-solicitation agreement. Overall, he is could receive an estimated $26.4 million in merger-related compensation.

• Domenick Cama, Investors' president and chief operating officer, is expected to receive about $15.7 million in merger-related compensation. He is set to serve as co-head of integration and as Citizens' New York City metro president.

Truist backs FDIC effort to aid mission-driven banks

The Federal Deposit Insurance Corp., which investment support from Truist Financial and Microsoft, is launching a fund supporting minority depository institutions and community development financial institutions.

The agency said in a press release Thursday that the Mission-Driven Bank Fund has $120 million in initial commitments. Truist and Microsoft are leading the investment fund, while Discovery will join as a founding investor.

"Microsoft and Truist have answered the call to become anchor investors and to assist the FDIC in developing this Fund for the benefit of mission-driven banks and, most importantly, the people and places these institutions serve,” FDIC Chairman Jelena McWilliams said in the release.

“It is our hope that with the commitment of these industry leaders, more private equity investors will join the growing ranks of those committed to building opportunity and prosperity where this support is needed the most,” McWilliams added.

The fund is expected to help MDIs and CDFIs provide affordable product and services, stimulate economy and community development, and build “opportunity and prosperity,” the release said.

The FDIC said it engaged about 70 CEOs from MDIs and CDFIs, along with their trade groups and potential investors, to discuss the project. 

The FDIC will serve as an advisor but it will not contribute capital to, manage, or be involved in the fund’s investment decisions.

First Interstate, Great Western announce $2B merger

First Interstate BancSystem in Billings, Mont., has agreed to buy Great Western Bancorp in Sioux Falls, S.D. 

The $18.9 billion-asset First Interstate said in a press release Thursday that it will pay $2 billion in stock for the $13 billion-asset Great Western. The deal is expected to close in the first quarter. 

“This is a transformative moment for our 53-year-old company,” Kevin Riley, First Interstate’s president and CEO, said in the release. 

"The strategic and cultural alignment between our organizations is what makes this transaction so exciting, as we both pride ourselves on being community banks with a strong focus on relationship building, customer service and community outreach,” Riley added. 

Five Great Western directors will join First Interstate’s board. Mark Borrecco, Great Western’s president and CEO, will join First Interstate as chief banking officer. 

First Interstate also said its existing dual-class stock structure will end at the record date of its next annual meeting. The plan is to roll all Class B common stock into Class A stock, at which point First Interstate will no longer be a controlled company. 

The Scott family will remain significant shareholders and family members will continue to serve in board positions post-transaction.  

First Interstate said it expects the deal to be 20% accretive to its 2023 earning per share, taking into account cost savings. The acquisition is also expected to be accretive to the company’s tangible book value per share.

First Interstate expects to incur $140 million of merger-related expenses. The company plans to cut about a fifth of Great Western’s annual noninterest expenses, or $56 million. 

Keefe, Bruyette & Woods, Barclays and Davis Polk & Wardwell advised First Interstate. Piper Sandler and Wachtell, Lipton, Rosen & Katz advised Great Western. Goldman Sachs and Latham & Watkins advised the Scott Family FIBK Shareholder Group.

Republic Bancorp in Kentucky taps new bank CEO

Republic Bancorp in Louisville, Ky., will have a new bank CEO next month.

The $6.2 billion-asset company said in a press release Wednesday that Logan Pichel will succeed Steve Trager as CEO of Republic Bank on Oct. 1. Pichtel, who will remain the bank’s president, has also joined the company’s board.

Trager will remain chairman and CEO of the company and chairman of the bank. Scott Trager remains the company’s president and the bank’s vice chairman.

“Logan's leadership and influence has enhanced every aspect of the bank’s culture and operations since joining the Republic team as president 15 months ago," Steve Trager said in the release. "I am excited for the next phase in the growth of Republic as I continue to work closely with him in his new role, and with senior management, as we enable our associates, our clients, and the communities we serve to thrive.” 

Pichel joined Republic last year from Regions Bank.

Goldman Sachs to buy point-of-sale lender GreenSky

Goldman Sachs Group in New York has agreed to buy point-of-sale lender GreenSky for roughly $2.2 billion. 

The deal is expected to close by the first quarter of 2022.

GreenSky offers payment plans to customers who are planning home-improvement projects or have health care costs. Banks use the company’s technology to make loans to super-prime and prime consumers.

GreenSky services a $9 billion loan portfolio; roughly 4 million customers have financed more than $30 billion of purchases using its technology since its formation in 2006. 

“We have been clear in our aspiration for Marcus to become the consumer-banking platform of the future, and the acquisition of GreenSky advances this goal,” David Solomon, Goldman’s CEO, said in a Wednesday press release. “GreenSky and its talented team have built an impressive, cloud-native platform that will allow Marcus to reach a new and active set of merchants and customers.”

Truist Financial recently said it would end a loan-origination agreement with GreenSky after agreeing to buy Service Finance, a home improvement lender. GreenSky later said the termination would not have a material impact on its financial results.

First Financial in Kan. to buy University National Bank

First Financial Bancshares in Lawrence, Kan., has agreed to buy University National Bank in Lawrence.

The parent of the $256 million-asset Great American Bank expects to acquire the $91.9 million-asset University National in the fourth quarter, according to an announcement from Olsen Palmer.

The price was not disclosed.

University National has one branch.

Olsen Palmer advised Lawrence Financial, the parent company of University National.

Home BancShares entering Texas with Happy State deal

Home BancShares in Conway, Ark., has agreed to buy Happy Bancshares in Amarillo, Texas.

The $17.6 billion-asset Home said in a press release Wednesday that it will pay $919 million in stock for the $6.3 billion-asset parent of Happy State Bank. The deal, which is expected to close in the first quarter, priced Happy at 166% of its tangible book value.

Home, the parent of Centennial Bank, will enter Texas when the deal closes. The company said the transaction positions it to “potentially acquire additional institutions over time.” 

The deal is expected to be 5.5% accretive to Home’s 2022 earnings per share and 9.2% accretive the following year. It should also be accretive to Home’s tangible book value per share.

J. Pat Hickman, Happy’s chairman, will join Home’s board. Mikel Williamson, Happy’s CEO, will join Home’s executive team. Branches in Texas will be branded as Happy State Bank, a division of Centennial Bank.

“We have expressed our desire to return to Texas for several years,” John Allison, Home’s chairman, president and CEO, said in the release. “We are thrilled to have found such a quality bank to partner with to make this expansion a reality.”

Home said it expects to incur $55 million in merger-related expenses. The company plans to cut about a third of Happy’s annual noninterest expenses.

"Strategically, the deal provides a meaningful entrance into high-growth Texas markets ... including entrance into Dallas/Fort Worth and Austin ... establishing Home as a dominant Southern institution," Brian Martin, an analyst at Janney Montgomery Scott, wrote in a note to clients.

Home "will now operating in two of the fastest-growing state in the U.S., leaving it well positioned for positive organic growth and to participate in future consolidation in" Texas and Florida, Martin added.

Piper Sandler and Mitchell, Williams, Selig, Gates & Woodyard advised Home. Stephens and Alston & Bird advised Happy.

First State Fremont in Neb. to buy Two Rivers Bank

First State Fremont in Fremont, Neb., has agreed to buy Two Rivers Bank in Blair, Neb.

The $288 million-asset parent of First State Bank & Trust plans to complete the purchase of the $148 million-asset Two Rivers in the fourth quarter, according to an announcement by Olsen Palmer. The price was not disclosed.

Two Rivers has two branches.

Olsen Palmer advised the seller.

Metropolitan in N.Y. to raise up to $172.5M in capital

Metropolitan Bank Holding in New York is planning to raise up to $172.5 million from selling common stock. 

The $5.8 billion-asset company said in a press release Monday that it plans to sell $150 million in public stock offering. The underwriters have an option to buy another $22.5 million of common stock. 

Metropolitan said it plans to use the net proceeds for general corporate purposes that could include the repayment or redemption of outstanding debt, share repurchases, investments in the bank and possible acquisitions, among other things. 

J.P. Morgan and Keefe, Bruyette & Woods are the joint book-running managers.

BofA announces sweeping changes to executive team

Bank of America will soon have a new chief financial officer as part of several management changes that include the addition of three women to the executive leadership team.

The $3 trillion-asset company announced on Friday that Alastair Borthwick, president of global commercial banking, will become CFO in the fourth quarter. He will succeed Paul Donofrio, who will become vice chair and focus on its sustainable finance business and overseeing the company’s investments in minority depository institutions and private equity funds.

Donofrio has been CFO for six years.

Lauren Mogensen, formally head of compliance and operational risk, was named global general counsel. She will replace David Leitch, who plans to retire next year.

The company said Holly O’Neill had been promoted to president of retail banking. She previously served as chief client care executive and head of consumer client services, overseeing the company’s contact centers. 

Wendy Stewart was promoted to president of global commercial banking. She had been co-head of global commercial banking in the southeast and head of wholesale credit strategy.

The company also said Aditya Bhasin would become its chief technology and information officer. Bhasin has been chief information officer and head of technology for consumer, small business, wealth management and employee technology. 

Tom Scrivener was named chief operations executive, where he will continue to oversee forgiveness of Paycheck Protection Program loans. He was head of consumer, small business and wealth operations. 

Finally, the company said that Cathy Bessant had been named vice chair of global strategy. Bessant, who had been the chief technology and operations officer, will move to Paris to work with the company’s boards in Europe.

“Our management team going forward will include individuals with many years of outstanding leadership in our company and the industry, increased global and international expertise, and more diversity of gender and race than ever before in our history,” Brian Moynihan, the company’s chairman and CEO, said in an internal letter.

Bank of America also said that Andrea Smith, its chief administrative officer, will retire at the end of this year. She plans to create and chair a new alumni council to focus on connecting and engaging Bank of America retirees and former employees as clients, advocates and community leaders. 

The changes come on the heels of the announcement that Anne Finucane, Bank of America’s vice chairman, and Thomas Montag, its chief operating officer and president of global banking and markets, will retire at the end of 2021.

KeyCorp sells $3 billion indirect loan portfolio

KeyCorp in Cleveland has sold its indirect retail auto loan portfolio.

The $181 billion-asset company said in a press release Friday that it sold the $3.2 billion portfolio to an affiliate of Waterfall Asset Management. Key did not disclose how much the Waterfall affiliate paid for the loans.

Key said its bank also purchased $2.8 billion of senior notes from a securitization collateralized by the sold loans. The bank will continue to service the loans.

The company was advised by Morgan Stanley, KeyBanc Capital Markets and Sidley Austin. Waterfall was advised on the transaction by Morgan, Lewis & Bockius.

Associated in Wis. shares plan to rev up lending, digital

Associated Banc-Corp in Green Bay, Wis., is beefing up in several areas, including auto finance, equipment finance and digital banking. 

The $34 billion-asset company said in a press release Thursday that it will also bulk up in asset-based lending, small-business lending and wealth management. 

"We have a significant opportunity to strategically drive revenue growth across our core business lines while also expanding our portfolio," Andy Harmening, Associated’s president and CEO, said in the release. 

"Building on our momentum over the last 120 days and capitalizing on the strengths of our franchise, our growth-focused and digital-forward initiatives will position us to deliver higher shareholder returns,” Harmening added. 

Associated said the improvements should add $2.6 billion of loans by the end of 2023. It should add $20 million of new revenue in 2022 and $60 million the following year. 

But Associated also said it expects to incur $705 million to $711 million of expenses this year as it bolsters certain businesses, or a 1.4% increase from the company’s previous expense estimate. About $5 million of the increase reflects the growth initiatives. 

The plan includes $50 million of spending over the next five years to improve Associated’s technology offerings. 

The company is making a series of moves, including branch closures and consolidating office space, to save about $10.5 million a year. 

Several key hires and promotions were announced in the release.

Raymond Temple was brought on to lead an asset-based lending team. Temple held a similar position at TCF Financial. Associated wants to have more than $150 million of asset-based loans on its balance sheet by late 2022, with $300 million in 2023. 

Doug Peacock was named head of digital delivery, where he will oversee the company’s digital roadmap across for consumer and business banking. 

Associated said it promoted John Thayer to become head of wealth management and Andrew Brueggeman to oversee the expansion of Small Business Administration lending. Stacy Stecker was tapped to become director of private banking, while David Kuipers was named to lead the company’s investment services team.

Associated said its equipment finance vertical should launch in the first quarter, with hiring beginning in coming months. Like asset-based lending, the company wants to have more than $150 million of equipment finance loans on its balance sheet by late 2022, with plans to double that amount the next year. 

The company said its auto finance business has established agreements with more than 550 dealerships and hired 40 bankers, with plans to start booking loans in the fourth quarter. The goal is to have more than $1 billion of auto loans on the books by the end of 2022 and $2 billion the next year. 

Associated also plans to expand commercial middle market lending in Milwaukee, Chicago and northern Wisconsin, reflecting several recent banker additions.

SmartFinancial entering Ala. markets after BBVA hires

SmartFinancial in Knoxville, Tenn., has entered three new markets in Alabama after hiring several former BBVA bankers.

The $3.7 billion-asset company said in a press release Wednesday that has expended into Montgomery, Dothan and Birmingham.

SmartFinancial hired Donna Cooper, a former BBVA government relationship manager, will serve as its market president for Montgomery. She will lead a team of seven associates, consisting of commercial and private bankers along with their support teams.

Jeff Williams, former BBVA Dothan market president, was named regional president for southern Alabama. He will initially be joined by a senior commercial banker, a private banker and their support team.

The company also hired Lee Smith, former east region CEO for BBVA, as Alabama chairman.

“We are extremely excited to enter both Montgomery, the state’s capital, as well as Dothan, one of Alabama’s strongest MSAs,” Billy Carroll, SmartFinancial’s president and CEO, said in the release. 

“SmartBank’s strategy is to recruit great bankers in great markets,” Carroll added. “As consolidation continues to change the banking landscape, the bank’s ability to attract experienced bankers has been one of our keys to successful growth. The ability to add this level of talent in such a short period of time is a once in a decade opportunity.”

CBTX in Texas freed from 2020 formal agreement

CBTX in Houston has been freed from a 15-month-old regulatory order.

The $4.1 billion-asset parent of CommunityBank of Texas disclosed in a regulatory filing Wednesday that the Office of the Comptroller of the Currency lifted the June 2020 formal agreement earlier this week.

The order instructed the bank to improve compliance with the Bank Secrecy Act and anti-money-laundering laws. It also required the bank to establish a committee to oversee compliance with the agreement and ensure that its BSA staff has sufficient authority and resources to fulfill its responsibilities.

CBTX also had to develop, implement and adhere to a written program of policies and procedures for BSA compliance. The bank was also required to adopt a BSA audit program and develop a training program for all appropriate bank employees.

The OCC recently freed Patriot National Bancorp in Stamford, Conn., from a 2018 formal agreement.

Central Valley in California taps insider as next CEO

Central Valley Community Bancorp in Fresno, Calif., has lined up its next CEO.

The $2.3 billion-asset company said in a press release Tuesday that James Kim will also become its president on Nov. 1. He will succeed James Ford, who announced plans to retire earlier this year.

Kim, who joined Central Valley in 2018, is the company’s chief operating officer.

“An experienced leader with proven success in the financial services sector, [Kim] is highly regarded by our company and an exceptional choice to be our next president and CEO,” Daniel Doyle, Central Valley’s chairman, said in the release.

“We look forward to the vision, leadership and perspective he will bring to the role," Doyle added.

CItizens Financial to buy capital markets firm

Citizens Financial Group in Providence, R.I., has agreed to buy JMP Group in San Francisco.

The $185 billion-asset Citizens said in a press release Wednesday that it will pay $149 million in cash for JMP, a capital markets firms that focuses on the health care, technology, financial services and real estate sectors.

The deal is expected to close in the fourth quarter.

JMP, which was founded in 1999, will operate as a wholly owned subsidiary of Citizens.

Mark Lehmann, JMP's president, will lead the business after the deal closes.

The acquisition “represents an attractive opportunity for us to continue to broaden both our capabilities and our customer base in our commercial banking segment,” Bruce Van Saun, Citizens’ chairman and CEO, said in the release. 

“The acquisition further strengthens Citizens’ growing corporate finance and strategic advisory capabilities, with a focus on high growth and compelling industry sectors," Van Saun added.

Sullivan & Cromwell advised Citizens. Keefe, Bruyette & Woods; JMP Securities; and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo advised JMP.

BayCom to buy Pacific Enterprise in Southern California

BayCom in Walnut Creek, Calif., has agreed to buy Pacific Enterprise Bancorp in Irvine, Calif.

The $2.1 billion-asset BayCom said in a press release Tuesday that it will pay $53.1 million in stock for the $647 million-asset Pacific Enterprise. The deal, which is expected to close in the first quarter, priced Pacific Enterprise at 87.1% of its tangible book value.

The transaction will expand BayCom’s presence in Southern California. Pacific Enterprise has $569 million of loans and $424 million of deposits.

Dennis Guida, Pacific Enterprise’s chairman, is expected to join the board of BayCom unit United Business Bank.

“From a strategic perspective, we think Pacific Enterprise Bank is a great fit,” George Guarini, BayCom’s president and CEO, said in the release. “The transaction will expand both our presence in Southern California and the breadth of our resources in the area of SBA and other government-guaranteed lending products.”

The deal is expected to by 6% to 8% accretive to BayCom’s earnings, excluding merger-related expenses. It should be immediately accretive to BayCom’s tangible book value.

BayCom said it plans to cut about 30% of Pacific Enterprise’s annual noninterest expenses.

BayCom was advised by Silver, Freedman, Taff & Tiernan and Janney Montgomery Scott. Pacific Enterprise was advised by Sheppard Mullin Richter & Hampton and Hovde Group. 

Nicolet in Wisconsin to close 15 branches

Nicolet Bankshares in Green Bay, Wis., plans to close 15 branches in Wisconsin and Michigan in December.

The $4.6 billion-asset company, which recently completed its purchase of Mackinac Financial, also said in a press release Tuesday that it will sell a branch in Birmingham, Mich., to Bank of Ann Arbor. The branch has $176 million of loans and $57 million of deposits.

“Customers continue to tell and show us that convenience no longer means a branch on every corner,” Mike Daniels, Nicolet’s president and CEO, said in the release.

“Convenience is being redefined as a seamless, frictionless experience through all channels,” Daniels added. “While we still view the branch system as an effective way to serve our customers, we also recognize the need to continue our investments in digital channels. We intend to find the right balance of investing in traditional branch channels and non-branch channels.”

Nicolet also has a pending deal to buy County Bancorp.

Patriot National freed from 2018 formal agreement

Patriot National Bancorp in Stamford, Conn., has been freed from a nearly three-year-old formal agreement with the Office of the Comptroller of the Currency. 

The $963 million-asset company said in a regulatory filing Tuesday that it was released from the November 2018 order after the OCC “concluded that the safety and soundness of the bank and its compliance with laws and regulations does not require the continued existence of the agreement.”

The 21-page formal agreement with the OCC had required Patriot to improve board oversight and strengthen the auditing and administration of its loan-loss allowance.

At that time, Patriot had a pending deal to buy Hana Financial’s Small Business Administration lending business for $83 million. The parties terminated the deal in April 2019.

MVB to let fintech clients offer Bitcoin-related products

MVB Financial in Fairmont, W.Va., has entered into a partnership to allow its fintech clients to offer Bitcoin-related products. 

The $2.7 billion-asset company said in a press release Tuesday that the collaboration with Victor Technologies and NYDIG, will integrate Bitcoin into MVB’s Banking-as-a-Service (BaaS) offerings.

MVB has more than 50 fintech, payments and gaming clients. 

“NYDIG has a vision to make Bitcoin more accessible,” Larry Mazza, MVB’s president and CEO, said in the release. “Adding Bitcoin functionality … will propel that vision into reality and help our clients compete.”

“Our partnership with MVB represents an important milestone for Bitcoin,” Patrick Sells, NYDIG’s chief innovation officer, said in the release.

"Up to this point, only a select few fintech companies have been able to offer Bitcoin products and services, and it has been difficult to achieve,” Sells added. “Now the industry has its first turnkey platform to seamlessly deliver white-label banking and Bitcoin products side by side.”

Meta Financial CEO retiring to start unbanked initiative

Meta Financial in Sioux Falls, S.D., will soon have a new CEO.

The $7.1 billion-asset company said in a press release Tuesday that Brad Hanson will also retire as president and as co-president and CEO of MetaBank on Sept. 30. He will serve as a strategic adviser until the end of 2022. 

Hanson plans to “focus on entrepreneurial and philanthropic endeavors,” including a project that will provide more-efficient cross-border remittance between the United States and Mexico for underbanked customers. Meta's venture capital arm will partner with him on the initiative.

Brett Pharr, MetaBank’s co-president and chief operating officer, will succeed Hanson as CEO of the company and the bank. He will also the boards of Meta Financial and MetaBank.

Anthony Sharett, chief legal and compliance officer at Meta Financial and MetaBank, will succeed Hanson as president and the company and the bank. 

“We thank Brad for his contributions over nearly 20 years, which helped to build Meta’s leadership position in the financial services and payments industries, and for his commitment to our mission of financial inclusion for all,” Douglas J. Hajek, the company’s chairman, said in the release.

Hanson has been the company’s president since 2013. He became CEO five years later.

First US Bancshares to close consumer finance unit

First US Bancshares in Birmingham, Ala., will shutter its consumer finance unit.

The $947 million-asset company disclosed in a regulatory filing that it will close the 20 locations in Alabama and southeast Mississippi associated with Acceptance Loan Company. The unit will continue to service its remaining loan portfolio as management prepares for its closure.

The unit made personal loans, along with loans for automobiles, ATVs, smaller equipment and household appliances.

The closure is “part of a long-term strategy to reduce expenses, fortify asset quality and focus … loan growth efforts in other areas, including … commercial lending and consumer indirect lending efforts,” the company said in its filing.

First US Bancshares said it will cut 56 positions in the third quarter tied to the branch closures. The unit should be completely shuttered by the end of next year.

The company said it expects to incur about $1.2 million in pretax charges during the third quarter, including $400,000 tied to severance expenses. Cost savings tied to the closure, along with the closing of four bank branches, should offset the upfront expenses by the end of this year.

“The company’s ongoing efforts will be focused on replacing reduced revenues at ALC with continued loan growth in the bank’s other loan portfolios, while maintaining the [loan-loss allowance] at prudent levels to account for the inherent uncertainty that may result from ALC’s branch closures,” the filing said.