VyStar braces for delay in biggest-ever CU-bank merger

VyStar Credit Union in Jacksonville, Fla., and Heritage Southeast Bancorp. in Jonesboro, Ga., are bracing for a delayed closing of the credit union’s pending acquisition of Heritage Southeast Bank.

The $11 billion-asset VyStar and the $1.6 billion-asset Heritage Southeast said in a press release Friday that the termination data for the deal has been pushed back from Dec. 31 to Feb. 28. The financial institutions said when they announced the deal in April that they expected it to close by the end of this year. 

The VyStar-Heritage Southeast merger, if completed, would be the biggest credit union purchase of a bank.

VyStar and Heritage Southeast said they are continuing to pursue regulatory approval from the Federal Deposit Insurance Corp., the National Credit Union Administration, the Georgia Department of Banking and Finance and the Florida Office of Financial Regulation. 

The institutions said they still hope to complete the deal this year, though they “recognize that the timing of regulatory approval and customer notifications may result in” a first-quarter 2022 closing.

VyStar, which originally agreed to pay $27 a share in cash for Heritage Southeast, said it will increase the consideration by an amount equal to Heritage Southeast’s consolidated net profit, after certain deductions, for each month from Oct. 1 through the closing date. So far this year, the banking company’s monthly consolidated net profit has averaged $1.2 million.

Black-owned bank proposed for central Ohio

A group of Black business owners is looking to form a bank in Columbus, Ohio. 

Organizers of Adelphi Bank filed an application with the Federal Deposit Insurance Corp. on Monday for deposit insurance. 

The proposed bank would be located on a site once occupied by Adelphi Loan & Savings, a former Black-owned bank in the city, according to the Columbus Dispatch. 

Organizers intend to apply for Adelphi to be a minority depository institution. The plan is to raise $20 million in initial capital. 

"The bank will strive to meet the banking needs of minority population and minority-owned business in its target market, including the growing number of African-Americans in the minority census tracts surrounding the Bank’s head office in Columbus, Franklin County," the application said.

Jordan Miller would serve as the proposed bank's CEO. Kevin Boyce would be the chairman.

The Columbus area has been a popular market for de novo efforts.

Ohio State Bank opened in Bexley in April 2019. 

Riverside Bank of Dublin opened in February, and First Bank of Central Ohio opened in Worthington debuted two months later.

Primis in Va. to launch digital bank in November

Primis Financial in McLean, Va., will debut its digital bank in mid-November. 

The $3.5 billion-asset company said it will launch the bank on Nov. 15, limiting participation to “family and friends.” The bank will be available to more participants in late December. 

“Development on expanded consumer and full commercial deposit services are already under way and likely something that we will introduce during the first quarter,” Dennis Zember Jr., Primis’ president and CEO, said in the release.

The company also disclosed that its Panacea Financial division, which focuses on physicians, made its first commercial loan in September and is recruiting commercial health care bankers and a credit team to expand the effort.

Panacea launched an in-training medical/dental school loan refinance product that allows physicians and dentists that are in training to refinance student debt at a lower interest rate. The division will also start to bank veterinarians by Nov. 30.

Finally, the division has signed partnerships with three national and state medical associations.

MetaBank to wind down community bank portfolio in 1Q

MetaBank Financial Group in Sioux Falls, S.D., has sold $30.2 million of loans as part of an ongoing plan to wind down its community bank loan portfolio.

The $6.7 billion-asset company said in a press release Wednesday that it sold the loans to Central Bank in Storm Lake, Iowa, earlier this month. 

MetaBank has agreements in place to sell another $161 million in loans, which would reduce the size of the portfolio to less than $8 million.

MetaBank said it expects community bank balances to hit zero by March 31. 

About $108 million of loans in the portfolio are considered substandard and doubtful, with $14.9 million classified as nonaccrual loans. The portfolio represents about 39% of MetaBank’s substandard and doubtful loans and 44% of its nonaccrual balances. 

The community bank portfolio had $486 million of loans a year earlier.

New York Community braces for delayed Flagstar closing

New York Community Bancorp’s pending purchase of Flagstar Bancorp in Troy, Mich., is the latest big bank merger to face a delayed closing.

Thomas Cangemi, chairman and CEO of the $58 billion-asset New York Community, said during a conference call Wednesday that he doesn’t expect the $2.6 billion acquisition of the $27 billion-asset Flagstar to close in 2021 as originally forecast.

New York Community, based in Hicksville, is preparing to complete the acquisition next year.

“Obviously, this is in the hands of our regulators,” Cangemi said during his company’s quarterly earnings call. “It's going through the application process, and we're anticipating closing as soon as we can in 2022.” 

The acquisition, announced in April, still needs approval from the Federal Reserve, the Federal Deposit Insurance Corp., and the New York State Department of Financial Services. 

First Citizen Bancshares in Raleigh, N.C., and CIT Group in New York recently extended the deadline for closing their $2.2 billion merger from Oct. 15 to March 1. The companies originally guided analysts to a completion in the first half of this year. 

Columbia Banking System in Tacoma, Wash., and Umpqua Holdings in Portland, Ore., have also indicated that the regulatory approval process is taking longer than expected. The $5.2 billion acquisition, announced earlier this month, is expected to close in mid-2022.

City National in Miami forms law firm group

City National Bank of Florida in Miami has formed a law firm group.

The $20.2 billion-asset company said the newly created group will provide services such as credit lines, debtor-in-possession accounts, receivership accounts, escrow services, plaintiffs’ firm financing and corporate trustee services. 

The group will also serve individuals, including law firm partners, shareholders and their lawyers. 

Jason Timmons, the group’s leader, joined City National in February after working at Seaside Bank and Trust for nearly seven years, according to his LinkedIn profile.

Valley in N.Y. planning mobile wallet for cannabis firms

Valley National Bancorp in New York is planning a digital payment solution that will target cannabis-related businesses. 

The $41.2 billion-asset company said in a Wednesday press release that Valley Pay will migrate cash usage to a secure, web application. The goal is to ease the burden on cannabis operators that rely on cash transactions. 

The company plans to launch a pilot program in coming months.

The platform “will empower them to be able to take in cashless transactions, which has been a major hurdle for this industry,” Ira Robbins, Valley’s president and CEO, said in a post through his LinkedIn account. 

“As one of the only national banks committed to supporting cannabis-related businesses, this is an important step in providing [them] with a vital financial tool that will make running their businesses safer and more efficient,” Robbins added.

Arrow in N.Y. announces branch closings, tech upgrades

Arrow Financial in Glens Falls, N.Y., has outlined plans to close three branches at a time when it is also beefing up its online offerings. 

The $4.1 billion-asset company said in a press release Tuesday that it will close two locations in Fort Edward, N.Y., and one in Wilton, N.Y. 

Arrow said it making improvements to its remaining Fort Edward branch. It is also renovating a new location in Wilton that will open in the fourth quarter to replace the offices to be closed. 

The company said it launched a new mortgage application platform and upgraded its business online banking platform during the third quarter.

HV Bancorp taps vice chairman as new president

HV Bancorp in Doylestown, Pa., has a new president. 

The $549 million-asset company said in a press release Tuesday that Bob Marino, its vice chairman, had also become president of unit Huntingdon Valley Bank. Marino joined HV Bancorp’s board nearly four years ago. 

Marino recently served as a founder, director and Mid-Atlantic division president of Spring Garden Lending, a company that provides alternative lending services to investors and developers.

Before joining Spring Garden Lending, Marino was president of Valley Green Bank’s Delaware Valley region. He also served as a Valley Green director until its sale in 2017. 

The new role for Marino “enables HVB to capitalize upon his Philadelphia banking knowledge, contacts and experience, adding tremendous value to our team members, customers and shareholders,” Travis Thompson, HV Bancorp’s chairman and CEO, said in the release.

Heartland in Iowa mulls charter consolidation

Heartland Financial USA in Dubuque, Iowa, is evaluating a plan to consolidate its 11 bank charters. 

Bruce Lee, the $11.9 billion-asset company’s president and CEO, said in a press release Monday that the analysis is part of a broader effort “to explore ways to improve operational efficiency.” 

Heartland said its initial analysis suggests that collapsing the charters would lead to revenue synergies and expense reductions of 3% to 5% of its existing cost base.

The company said it expects to discuss the process in more detail later this year when the evaluation is complete.

The sizes of the charters range from Minnesota Bank & Trust, at $873 million of assets, to First Bank & Trust, with $2.9 billion of assets.

Equity Bancshares to sell three northern Kan. branches

Equity Bancshares in Wichita, Kan., has agreed to sell branches in three northern Kansas markets to UBT Bancshares in Marysville, Kan.

The $4.3 billion-asset Equity said in a press release Monday that it will sell three branches, located in Concordia, Belleville and Clyde, to the parent of the $738 million-asset United Bank and Trust. 

The sale, which includes $60 million of deposits and $24 million of loans, is expected to close in the second quarter. 

“Our focus as a community bank includes doing what is right for our communities, businesses, and families in our regions while delivering value to our shareholders” Brad Elliott, Equity’s chairman and CEO, said in the release. 

The branches “will serve as a resource to consumers and businesses as part of a like-minded bank network in United Bank and Trust,” Elliott added. 

Equity had gained the branches from its recent purchase of AmericanState Bancshares. 

UBT Bancshares was advised by Stinson.

GreenState Credit Union to buy Illinois Bank

GreenState Credit Union in North Liberty, Iowa, has agreed to buy Midwest Community Bank in Freeport, Ill.

The $8.5 billion-asset GreenState will buy assets and assume liabilities of the $368 million-asset Midwest Community, according to an announcement by Hovde Group. 

Hovde advised Freeport Bancshares, which is selling Midwest Community. 

The deal is expected to close in the second quarter. Midwest Community has three branches, seven loan production offices, $308 million of loans and $313 million of deposits. GreenState will also buy Blueleaf Lending. 

GreenState did not disclose the price it will pay.

GreenState in May agreed to buy the $731 million-asset Oxford Bank & Trust in Oak Brook, Ill., and the $345 million-asset Premier Bank in Omaha, Neb.

This the 12th CU-bank deal announced in 2021.

Esquire selling loans tied to NFL concussion settlement

Esquire Financial Holdings in Jericho, N.Y., plans to sell its portfolio of loans tied to the National Football League’s concussion settlement program.

The $1.1 billion-asset company said in a press release Monday that it moved the $23.6 million portfolio to held-for-sale status during the third quarter as part of a plan to sell the loans to an unnamed fund. The loans had a fair value of $14.2 million on Sept. 30, based on an independent third-party valuation. 

Esquire, which stopped originating NFL loans in December 2017, said the sale will reduce its exposure and extend the portfolio’s duration. 

The company recorded a $3 million loan-loss provision in the third quarter in conjunction with the move. 

Esquire had previously disclosed that, as of June 30, it had received payoffs on about 29% of its NFL claimant loans. At that point, the company had charged off 6% of its NFL loans. The loans had a weighted average remaining maturity of less than a year. Esquire had classified $4 million of loan exposures as special mention and $2.3 million as substandard.

MainStreet in Va. forms division focused on fintech

MainStreet Bancshares in Fairfax, Va., has created a division dedicated to serve fintechs.

The $1.7 billion-asset company said in a press release Monday that Avenu will expand on its Banking-as-a-Service (Baas) platform by offering fintechs a streamlined way to accept deposits and facilitate payments while managing risk and meeting compliance obligations. 

“We have come to know many fintech innovators and understand their unique needs,” Jeff Dick, MainStreet’s chairman and CEO, said in the release. 

“By harnessing the capabilities under our Avenu brand, we are scaling up to serve the booming fintech segment with a single, streamlined solution,” Dick added. “By providing BaaS, MainStreet Bank has forged a path to access low-cost deposits, generate fee income, and tap new markets, which translates into enhanced shareholder value.” 

Todd Youngren, Avenu’s president, said the platform can get fintechs “up and running in 30 to 60 days.” The process includes a risk assessment of the fintech client.

Trustmark paying $5M to resolve Fair Housing Act claims

Trustmark in Jackson, Miss., will pay a $5 million civil money penalty tied to consent orders with regulators. 

The $17.1 billion-asset company said in a press release Friday that its bank entered into an order with the Office of the Comptroller of the Currency and a separate order with the Justice Department and the Consumer Financial Protection Bureau. 

The orders address allegations that Trustmark violated the Fair Housing Act, the Equal Credit Opportunity Act, and the Consumer Financial Protection Act within the Memphis, Tenn., market. 

Trustmark agreed to pay $4 million to satisfy a civil money penalty in the OCC’s consent order; another $1 million will be paid to the CFPB. 

The company is also required to implement a fair lending plan and invest nearly $3.9 million over five years in a loan subsidy fund to increase credit opportunities to residents of majority-Black and Hispanic neighborhoods. 

Trustmark also agreed to devote at least $400,000 over five years to community development partnership contributions and $200,000 annually over five years to advertising, community outreach and credit repair and education in the Memphis area. 

The company agreed to open a mortgage loan production office to serve residents in a majority-Black and Hispanic neighborhood in Memphis. 

The orders must be approved by the U.S. District Court for the Western District of Tennessee.

Piermont in N.Y. creates lending platform for fintechs

Piermont Bank, a de novo in New York, has created a platform to offer credit products to its fintech clients. 

The $347 million-asset bank said in a press release that BancFi will also serve fintechs’ end-users. The effort builds on the bank’s Banking-as-a-Service platform, which consists of more than 30 fintech clients.

The bank also said it is committing $20 million of newly raised capital to technology initiatives. 

“The growth we have experienced since our launch in 2019 validates the digital plus human hybrid banking model we built,” Wendy Cai-Lee, Piermont’s founder and CEO, said in the release.

“Currently, equity takes prominence in how start-ups pay for their growth,” Cai-Lee added. “If, as a startup, you can borrow capital at low and effective rates, it is always better for your company’s growth than selling shares in your business.” 

Piermont said it had designed a startup-forward onboarding and implementation process can get a fintech client set up in as little as six weeks.  BancFi will provide fintechs with a variety of products, including working capital, warehouse lines and deposit-backed lines of credit.

Ally returning to credit cards with Fair Square purchase

Ally Financial in Detroit is getting back into credit cards with an agreement to buy Fair Square Financial in Wilmington, Del.

The $79 billion-asset Ally said in a press release Thursday that it will pay $750 million in cash for Fair Square. The deal is expected to close in the first quarter.

Ally said the deal provides it with “a scalable, digital-first credit card platform.”

Fair Square, founded in 2016, has focused on providing products that rely on proprietary, analytics-based underwriting. The company has 658,000 cardholders and $763 million in loan balances.

Fair Square uses web and mobile platforms, along with fully digital application process.

Ally ended a three-year credit card relationship with TD Bank in 2019 after deciding that the $100 million portfolio was falling short of expectations.

Ally had a deal in place to buy subprime credit-card lender CardWorks for $2.7 billion put the companies terminated the transaction during the early days of the coronavirus pandemic.

Citi, Goldman Sachs and Sullivan & Cromwell advised Ally. J.P. Morgan and Skadden, Arps, Slate, Meagher & Flom advised Fair Square.

Business First to enter Houston with bank acquisition

Business First Bancshares in Baton Rouge, La., has agreed to buy Texas Citizens Bancorp in Houston.

The $4.4 billion-asset Business First said in a press release Thursday that it will pay $52.9 million in stock for the $517 million-asset parent of Texas Citizens Bank. The deal, which is expected to close in the first quarter, priced Texas Citizens at 151% of its tangible book value.

Texas Citizens has six branches, $366 million of loans and $452 million of deposits.

“We have experienced success diversifying our geographic exposure over the past few years,” Jude Melville, Business First’s president and CEO, said in the release. “This partnership … is an opportunity for us to accelerate our transition into a regional institution.”

Business First said it expects the deal to be more than 15% accretive in 2023. It should take the company three years to earn back an estimated 5% dilution to its tangible book value.

Business First plans to cut about $9.2 million of Texas Citizens’ annual noninterest expenses. The company plans to incur $12.1 million of merger-related expenses.

Duncan Stewart, Texas Citizens’ chairman and CEO, will become chairman of the Houston region for Business First’s bank Mike Cornett, Texas Citizens’ president, will become vice chairman of the Houston region.

Business First said Don Hingle, its director of market expansion, will move to Houston as its regional president.

Texas Citizens had a 2019 enforcement action lifted earlier this month.

Stephens and Fenimore Kay Harrison advised Business First. Piper Sandler and Bracewell advised Texas Citizens.

Raymond James plans to buy TriState Capital

Raymond James Financial in St. Petersburg, Fla., has agreed to buy TriState Capital Holdings in Pittsburgh. 

Raymond James, parent of the $35 billion-asset Raymond James Bank, said in a press release Thursday that it will pay about $1.1 billion in cash and stock for the $12 billion-asset TriState. The deal is expected to close in next year.

TriState “has a terrific, client-centric franchise focused on serving clients with premier private banking, commercial banking and niche investment management products and services,” Paul Reilly, Raymond James’ chairman and CEO, said in the release.

“As we have followed the firm and management team over the past several years, including as its largest deposit client, we’ve admired its leadership position in offering securities-based lending through a scalable and robust technology platform,” Reilly added. “This acquisition further illustrates our commitment to utilize excess capital through organic and inorganic growth that we expect to drive strong returns for shareholders over the long term.” 

TriState will continue to operate as a stand-alone division and independently chartered bank unit of Raymond James. 

Jim Getz will remain TriState’s chairman and CEO, while Brian Fetterolf will continue to serve as CEO of TriState Capital Bank. Tim Riddle, CEO of Chartwell Investment Partners, will also retain his title.

Raymond James said it expects the deal to be accretive to its earnings per share in the first full year after closing, excluding merger-related expenses, with over 8% accretion after the third year. 

The primary driver of cost synergies involves replacing a portion of TriState’s current and future higher-cost deposits with lower-cost deposits from the Raymond James Bank Deposit Program. 

Raymond James was advised by Raymond James & Associates and Sullivan & Cromwell. TriState was advised by Stephens and Mayer Brown.

Banner efficiency effort includes branch closures

Banner Corp. in Walla Walla, Wash., plans to close 15 branches as part of a broader efficiency effort. 

The $16.6 billion-asset company said in a presentation Thursday that its Banner Forward program will also involve reducing office and operations space and minimize third-party spending. 

The goal is to lower annual expenses by $15 million in 2022 and by $25 million the following year. About 60% of the cost savings will come from compensation, while another 20% is tied to lower occupancy costs. 

Banner Forward is “a bank-wide initiative to drive revenue growth and reduce operating expense,” Mark Grescovich, the company’s president and CEO, said in a press release.

“The focus … is to accelerate growth in commercial banking, deepen relationships with retail customers, advance technology strategies to enhance our digital service channels, while streamlining underwriting and back office processes,” he added.

Banner said its efforts will also feature the implementation of robotic process automation (RPA) to streamline back-shop processes, along with new loan origination technology. The company also plans to accelerate client acquisition through optimized digital marketing and new tech-enabled digital account opening options. 

The program has upfront costs. 

The company incurred $7.6 million of restructuring charges in the third quarter, with an expectation of another $6 million of charges through the first half of next year. 

The company also plans to increase its focus on middle-market clients, while optimizing client pricing and deepening client use of treasury management products.

Cambridge Bancorp in Mass. closes two branches

Cambridge Bancorp in Cambridge, Mass., closed two branches during the third quarter. 

The $4.5 billion-asset company said in a press release Tuesday that it shuttered offices in Wellesley Square, Mass., and Pease Tradeport, N.H. It also moved its Concord, N.H., wealth management office to a new location. 

Cambridge recorded $787,000 of expenses tied to the moves. 

The company’s net income fell slightly from a year earlier, to $13.3 million. 

Noninterest expenses, including the charge tied to the branch closings, increased slightly, to $25.5 million.

Bank-backed fund invests in fintech Monit

Monit, a Boston fintech that has created a financial platform for small businesses, has become the first investment for JAM FINTOP Banktech, an investment fund that is targeting tech firms. 

Monit said in a press release that the investment also includes a commercial partnership with the fund, which is backed by 66 small and midsize banks. JAM FINTOP Banktech is a created  by JAM Special Opportunity Ventures, an affiliate of Jacobs Asset Management, and FINTOP Capital. 

Monit was launched last year. JAM FINTOP Banktech raised $150 million in April.

The amount invested in Monit was not disclosed, though the fintech had previously raised $5.2 million.

“We are excited to add JAM FINTOP Banktech to our team of amazing investors,” Steve Dow, Monit’s CEO, said in the release. “The partnership goes well beyond investment. As a team of bankers and technologists ourselves, our visions are aligned in helping America’s business owners thrive and supporting the drive of community bankers to add value as trusted advisers to those businesses.”

“At Busey, we are always looking for ways to stay close to the customer base and implement tools that allow our business customers to operate more efficiently,” Farhan Yasin, chief technology officer at Busey Bank, said in the release. 

“A partnership with Monit is a natural integration that provides our customers access to critical information for their business like cashflow and accounts payable and receivable for an aggregated customer view,” Yasin added. 

“SMBs are woefully underserved by the large national banks, which gives regional banks like Valley an opportunity to step into the gap using modernization and innovation like Monit,” said Stuart Cook, chief digital product officer at Valley Bank. “There’s an opportunity for every bank to serve their SMB customers better using new tech and innovation but they don’t have the time or resources to build it.”

Third Coast in Texas could raise $75M from planned IPO

Third Coast Bancshares in Humble, Texas, could raise $75 million as part of a planned initial public offering.

The $2 billion-asset parent of Third Coast Bank filed its registration statement with the Securities and Exchange Commission on Friday. The company did not disclose how many shares it will sell or the potential pricing; it said the amount of capital was provided for calculating the registration fee.

Third Coast said it plans to use net proceeds from the offering to support organic growth and other purposes that could include maintaining required capital levels and potential acquisitions. The company does not have any definitive agreements in place right now for acquisitions.

Third Coast earned $12.1 million in 2020.

Investar recording special provision tied to Hurricane Ida

Investar Holding in Baton Rouge, La., plans to recognize a $21.6 million loan-loss provision in the third quarter tied to hurricane damage to a borrower’s collateral.

The $2.7 billion-asset company said in a regulatory filing Thursday that the provision is tied to multiple loans with an outstanding aggregate loan balance of $40.4 million. 

The loans are secured by various types of collateral. Hurricane Ida, which hit in August, significantly reduced the value of some of the collateral. 

“At this time, the company is unable to quantify the amount of potential recoveries in excess of what is reflected in the current impairment charge estimate or if further impairment charges will be incurred related to this lending relationship,” the filing said. 

“The company currently expects an indeterminate amount of expenses in connection with the preservation and recovery of collateral," the filing added. 

Investar said it is unaware of additional material impairments tied to Hurricane Ida. 

Analysts said they expect the situation will lead Investar to report a third-quarter loss when it announces results on Oct. 21. 

Brett Rabatin, an analyst at Hovde Group, wrote in a client note that he expects a loss of about $10 million.

“While the credit would very likely not have been an issue without the impact of Hurricane Ida, and there is a lack of other systemic issues related to the hurricane, the net charge-off is big enough to warrant slightly less optimism on our thesis, despite the below-peer valuation and potential for profitability improvement in the next two years,” Rabatin wrote.

BankFirst in Miss. making Ala. push with acquisition

BankFirst Capital in Columbus, Miss., has agreed to buy F.B.H. Corp. in Fayette, Ala. 

The $1.8 billion-asset BankFirst said in a press release Thursday that it expects to buy the parent of the $223 million-asset Citizens Bank of Fayette in the fourth quarter. BankFirst did not disclose the price it will pay.

"We are excited about the proposed acquisition … and believe the cultural alignment between our organizations is strong,” Moak Griffin, BankFirst's president and CEO, said in the release. 

“We believe this acquisition furthers our vision of partnering with other community banks that have strong core deposit funding and a tradition of relationship building, customer service, and community involvement,” Griffin added. “We are eager to further expand our community banking model in … Alabama by operating two locations in Fayette.” 

Robert Mills, Citizens Bank's president and CEO, will become BankFirst's Fayette regional executive.

BankFirst was advised by Olsen Palmer and Hunton Andrews Kurth. F.H.B. was advised by Gerrish Smith Tuck Consultants and Gerrish Smith Tuck.

Peoples in Pa. to record 4Q gain from selling Visa stock

Peoples Financial Services in Scranton, Pa., plans to record a large gain in the fourth quarter after its sells Visa shares. 

The $3 billion-asset company said in a regulatory filing that its bank on Oct. 8 agreed to sell nearly 45,000 Class B shares, adding that the entire purchase prices will be realized as a pretax gain. 

The sale is expected to settle later this month with the gain to be reported in the company’s fourth-quarter results as an after-tax gain of $9.6 million. 

The transaction will have a positive impact on the bank’s regulatory capital, which will be used for capital management and to support the company’s organic growth. 

The bank received roughly 73,000 Class B Visa shares in March 2008 as part of its membership interest. More than 28,000 shares were redeemed in connection with Visa’s initial public offering in 2008.

First Internet to buy franchisee loans from ApplePie

First Internet Bancorp in Fishers, Ind., has reached an agreement with ApplePie Capital to buy conventional loans to franchisees.

The $4.2 billion-asset First Internet said in a press release Wednesday that it plans to purchase $100 million of ApplePie-originated loans by the end of this year. 

“As a lifelong entrepreneur, I know the value of working with a bank that understands the challenges and rewards business owners face,” David Becker, First Internet’s chairman and CEO, said in the release. 

First Internet “is committed to providing small business owners access to holistic financial services and thoughtfully designed digital experiences,” Becker added. “We are excited to join forces with ApplePie to help provide franchisees with the unique financing solutions they need to succeed.”

ApplePie sources and originates loans to franchisees in all 50 states. The loans are used for new franchise locations, acquisitions, remodels, refinances, equipment and recapitalizing existing businesses. The company has provided nearly $1.3 billion in funding since 2015. 

"This announcement is not a surprise as [First Internet] has talked about securing new loan sources for some time now,” John Rodis, an analyst at Janney Montgomery Scott, wrote in a note to clients. 

The ApplePie arrangement “helps to offset the expected decline in health care loans as that partner is being acquired by another bank,” Rodis added.

First Internet bought an equity stake in Lendeavor in 2017 that included a five-year commitment from the bank to buy up to $120 million of loans to health care practices each year.

Lendeavor, which rebranded as Provide in 2020, was recently sold to Fifth Third Bancorp in Cincinnati.

Catalyst in La. raises $53M from mutual conversion

Catalyst Bancorp in Opelousas, La., has raised $52.9 million from its initial public offering and the mutual-to-stock conversion of St. Landry Homestead Federal Savings Bank. 

The parent of the $239 million-asset St. Landry said in a press release Wednesday that it sold nearly 5.3 million shares at $10 each. The stock is trading under the stock symbol “CLST.” 

“We are grateful for the trust our customers and investors have placed in us by investing in our IPO,” Joe Zanco, Catalyst’s president and CEO, said in the release. 

The additional capital “will help us continue building a dynamic, full-service community bank focused on partnering with businesses and professionals across the region to help them grow and add jobs,” Zanco added. 

Piper Sandler was the company’s selling agent. Silver, Freedman, Taff & Tiernan provided legal counsel to the company and the bank, while Luse Gorman advised Piper Sandler.

NorthEast Community writing down only NPA on books

NorthEast Community Bancorp in White Plains, N.Y., plans to write off the only nonperforming loan on its books.

The $1.1 billion-asset company said in a press release Tuesday that the nonresidential real estate loan had a $3.6 million balance on June 30. It is secured by commercial real estate in Greenwich, Conn., and guaranteed by its two borrowers. 

The loan, which is in foreclosure, is subject to Connecticut’s ongoing foreclosure moratorium and backlog. 

NorthEast Community opted to write off the loan after an appraisal determined that the property’s value with an existing parking easement is zero. The company said it plans “to aggressively seek recovery of all amounts due from the personal guarantors of the foreclosed loan.” 

As a result of the writedown, the company said it expects to record a third-quarter loan-loss provision for at least $3.5 million. The loan-loss allowance should have at least $5.1 million following the writedown and the provision.

NorthEast Community said that it expects to report third-quarter net income of $730,000, with not nonperforming assets in its portfolio. The company earned $3.7 million in the second quarter.

Synovus specialty finance CEO dies in plane crash

Synovus Financial in Columbus, Ga., announced that its specialty finance division CEO died in an airplane crash on Friday. 

The $55 billion-asset Synovus said in a public statement issued Monday that Jonathan Rosen and his assistant, Lauren Harrington, along with his daughter and her friend, were killed in the plane crash.

Rosen and Harrington joined Synovus in 2016 when it bought Entaire Global One, a life insurance premium finance company.

“From day one, Jonathan and Lauren made tremendous impacts on our company and on those who in any way encountered them,” Kevin Blair, Synovus’ CEO, said in the statement. “Their loss will be painfully felt by so many.”

Umpqua, Columbia merger to create $50B asset bank

Columbia Banking System in Tacoma, Wash., is merging with Umpqua Holdings in Portland, Ore.

While the $18 billion-asset Columbia is the legal acquirer, shareholders of the $29.2 billion-asset Umpqua will own 62% of the combined company. The deal, estimated to have a value of $5.2 billion, is expected to close in mid-2022.

Columbia will be the company’s name, while the bank will operate under the Umpqua brand. The combined company will be based in Tacoma, though the bank will be headquartered in Portland.

The merger "brings together two well-respected organizations and talented teams, accelerating our shared strategic objectives to create the leading regional bank headquartered in the West,” Cort O’Haver, Umpqua’s president and CEO, said in a Tuesday press release. 

“Together, with increased scale, we’ll have the ability to provide expanded opportunities for associates and serve customers through an even more comprehensive suite of solutions,” O’Haver added. “We’ll also be able to strengthen our ongoing investment in our communities and deliver tremendous value for shareholders.

“Umpqua shares our values and relationship-based business model,” Clint Stein, Columbia’s president and CEO, added. "This is a historic partnership that will enhance what both banks are able to do for clients, team members and communities, while driving significant value for our shareholders.”

Stein will remain president and CEO, while O’Haver will become executive chairman. Each company will appoint seven directors to the combined board. 

The companies plan to cut about 12.5% of their combined annual noninterest expenses, or $135 million. They expect to incur $236 million of merger-related expenses, including a $20 million charitable foundation donation.

The deal is expected to be accretive to the earnings per share of both companies. It should take nearly three years to earn back the expected 5.9% dilution to the combined company’s tangible book value. 

Columbia agreed in June to buy Bank of Commerce Holdings in Sacramento, Calif., for $266 million in stock. 

Keefe, Bruyette & Woods and Sullivan & Cromwell advised Columbia. J.P. Morgan Securities and Wachtell, Lipton, Rosen & Katz advised Umpqua.

Oportun withdraws bank charter application

Oportun Financial, a consumer lender in San Carlos, Calf., has withdrawn its application with the Office of the Comptroller of the Currency for a bank charter. 

The company said in a Friday press release that it plans to revisit the application, adding that it had “forged a constructive relationship with the OCC” since filing its initial application nearly a year ago.

More than 20 federal and state consumer advocacy groups wrote to acting Comptroller Michael Hsu on Aug. 4, asking the OCC to delay any decision on the application until the Consumer Financial Protection Bureau had completed an investigation into Oportun’s debt-collection practices. 

Oportun announced a partnership with MetaBank in Sioux Falls, S.D., last year that allowed the lender to expand its operations from 12 states to 33 states.

PCB in Los Angeles gives update on ransomware attack

PCB Bancorp in Los Angeles is working with clients impacted by a ransomware attack that took place over the summer.

The $2.1 billion-asset parent of Pacific City Bank provided an update on its efforts to address fallout from the Aug. 30 incident.

The company said in a regulatory filing that an ongoing investigation revealed that the incident impacted files containing certain customer data, including personal information of customers and their employees such as names, addresses, social security numbers and tax withholdings. 

PCB said it is in the process of notifying all individuals identified to date, including clients and others whose information was contained in those files. The company said that all impacted individuals will be offered free Equifax Complete Premier credit monitoring and identity theft protection services. 

PCB noted that it had informed law enforcement and appropriate authorities. The company has also been working with third-party forensic investigators “to understand the nature and scope of the incident,” the filing said.

Bank7 to buy neighboring bank in Oklahoma

Bank7 in Oklahoma City has agreed to buy Watonga Bancshares in Watonga, Okla. 

The $1.2 billion-asset Bank7 said in a press release Thursday that it will pay $32 million in cash for the parent of the $241 million-asset Cornerstone Bank. The deal, which is expected to close in the fourth quarter, valued Watonga at 141% of its tangible book value.

Cornerstone has three branches, $215 million of deposits and $116 million of loans.

"This addition is a great fit for Bank7, as it adds scale to our Oklahoma market and increases core funding for our continued growth,” Thomas Travis, Bank7’s CEO, said in the release. 

The deal is expected to be 7.3% accretive to Bank7’s 2022 earnings per share. It should take Bank7 three years to earn back any dilution to its tangible book value. 

Bank7 plans to cut 40% of Cornerstone’s annual noninterest expenses, or $2.6 million. It expects to incur $900,000 of merger-related expenses. 

Bank7 was advised by Keefe, Bruyette & Woods and Paul Foster Law Offices. Cornerstone was advised by D.A. Davidson and McAfee & Taft.

Eastern to sell Century's HQ site for $20.5 million

Eastern Bankshares in Boston is planning to sell the corporate offices of Century Bancorp in Medford, Mass. 

The $17 billion-asset Eastern disclosed in a regulatory filing Wednesday that it has an agreement to sell a five-story office building, a three-story building and nearly five acres of land for $20.5 million.

Eastern agreed in April to buy Century for $642 million. 

The sale of the property is contingent on the Century acquisition closing. Both transactions are expected to happen in the fourth quarter. 

The property’s buyer has 45 days from Sept. 30 to conduct due diligence on the site. 

Eastern, following the property’s sale, will have the right to continue to occupy the buildings until the end of April at a cost of $500 per day, along with the costs for utilities, insurance and property maintenance.

Golf outing served as intro to United-Reliant merger

A two-day golf trip kickstarted conversations that led to the pending sale of Reliant Bancorp in Brentwood, Tenn., to United Community Banks in Blairsville, Ga. 

The $19.6 billion-asset United agreed on July 14 to buy the $3.1 billion-asset Reliant for $517 million. 

Before we dig into the background, based on a recent regulatory filing tied to the merger, here is a recap the deal’s financial details. 

• The deal, which is expected to close in the first quarter, priced Reliant at 194.1% of its tangible book value.

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

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

• DeVan Ard Jr., Reliant’s chairman and CEO, is expected to become United’s Tennessee state president. 

Now for the history of the pending transaction:

• Talks between the companies began in March when Lynn Harton, United’s president and CEO, and Ard met in Ridgeland, S.C., for two days of golfing. 

• Reliant’s directors on March 17 designated the board’s executive committee to provide strategic direction and guidance throughout the process. 

• Between late March and early April, Reliant’s investment bank contacted four financial institutions, including United, to gauge their interest in a possible deal. At the same time, Reliant populated a virtual data room so suitors could conduct due diligence. 

• United and one other financial institution expressed interest in receiving nonpublic information about Reliant. Each signed confidentiality agreements on April 6. The timing was “less than ideal” for the other two companies that were contacted, the filing said. 

• United and the other suitor were asked to provide a preliminary indication of interest by May 3. United initially submitted an all-stock offer than valued Reliant at $32.50 a share. The other bidder also proposed an all-stock buyout valued at $31.60 a share.

• During a May 4 meeting, Reliant’s board authorized Ard to move to the next phase of negotiations with United and the other bidder. Each were asked to provide final proposals by June 7. They were also given an initial draft of the merger agreement with instructions to comment on it by June 1.

• United’s final offer involved all stock and valued Reliant at $33.95 a share. The company also said it had “effectively concluded its due diligence” and was in position to announce a deal by mid-July.

• The other bidder proposed an all-stock acquisition valued at $33.87 a share. The offer included two board positions. The institution also said it could announce a deal by mid-July.

• Reliant’s board decided during a June 9 meeting to further negotiate the terms of a non-binding letter of intent with United. The letter of intent, signed on June 11, granted United exclusivity through July 15.

• Each company’s board unanimously approved the acquisition on July 14. It was announced later that day.

California group looking to form new bank

A group in Irvine, Calif., is looking to open a bank. 

Organizers of Beach Cities Commercial Bank applied with the Federal Deposit Insurance Corp. on Sept. 27 for deposit insurance. They plan to raise $25 million to $27 million in initial capital, according to the application.

“The bank plans to provide better service than is currently available to customers in the bank’s market areas, using the skills and experience of a team of seasoned bankers who have been involved in the target market for many years,” the application said.

“The bank plans to serve the banking needs of small- and medium-sized businesses, business professionals and business owners in the bank’s market areas through the provision of traditional business banking products and services tailored to those business clients’ unique needs,” the application added.

Organizers plan to open a second branch in Encinitas, Calif. 

H. Kent Falk is the proposed bank’s CEO. Falk is listed as a former chief credit officer at Partners Bank in Mission Viejo, Calif., according to his LinkedIn profile.

PDL in N.Y. seeks $225M in capital from federal program

PDL Community Bancorp in Bronx, N.Y., has applied for $225 million in capital through a new program handled by the Treasury Department. 

The $1.5 billion-asset parent of Ponce Bank disclosed in a regulatory filing Tuesday that it had applied on Aug. 31 for funds from the Emergency Capital Investment Program. PDL has not yet been approved for the funds.

Under the program, created by the Consolidated Appropriations Act of 2021, the Treasury is authorized to provide up to $9 billion in capital directly to community development financial institutions and or minority depository institutions. 

The funds would allow CDFIs and MDIs to provide loans, grants and forbearance to small businesses, minority-owned businesses and consumers – especially in low-income and underserved communities – that may be disproportionately impacted by the economic effects of the pandemic. 

The Treasury’s investment would be exchanged for senior perpetual noncumulative preferred stock. PDL is in the process of converting to a fully stock-owned company to be called Ponce Financial Group. 

PDL said the Treasury has indicated that the funding would be treated as Tier 1 capital.

There would be no dividends in the first two years after issuance. The dividend rate for the next seven years could range from 0.5% to 2%, “depending on the level of qualified and/or deep impact lending made in targeted communities,” the filing said.

Frandsen Financial to buy two banks in Minnesota

Frandsen Financial in Lonsdale, Minn., has agreed to buy Bank of Zumbrota and Pine Island Bank from Zumbrota Agency.

The $2.6 billion-asset Frandsen said in a press release that the deal for the $201 million-asset Bank of Zumbrota and the $115 million-asset Pine Island is expected to close by the end of this year. Frandsen did not disclose the price it will pay. 

“We look forward to serving their customers and supporting the communities of Zumbrota and Pine Island for years to come,” Chuck Mausbach, Frandsen’s CEO, said in the release.

“Both banks’ commercial and agricultural customers will benefit from larger lending capabilities, strong treasury management products and SBA lending expertise,” Mausbach added. “Retail customers will have access to additional mobile and online banking technologies.” 

“It was clear our family didn’t have another generation of bankers to make a third generation business,” Jeff Perra, Zumbrota Agency’s president, said in the release. “The banks should be part of a larger organization to grow in our services offered to our growing customer base.” 

Perra will continue to oversee the Bank of Zumbrota through a transition period that is expected to end next year. Chris Nelson will remain president and CEO of Pine Island Bank. 

Oak Ridge Financial Service Group advised Zumbrota Agency.

Nymbus moving HQ as part of collab with VyStar CU

Nymbus has moved its corporate headquarters to Jacksonville, Fla., to be closer to a large credit union that led a major investment in the technology company earlier this year.

Nymbus said in a press release Tuesday that the move from Miami reflects its collaboration with VyStar Credit Union. VyStar, which invested $20 million in the Nymbus CUSO, is also working with the tech company on online and mobile banking platforms. 

Nymbus plans to bring 600 jobs to the area over time.

The move “represents a new partnership model that takes an excitingly progressive approach to vendor collaboration and accountability,” Anne Miela, Nymbus’ chief operations officer, said in the release. 

“Our teams are now afforded the opportunity to truly innovate alongside one another in a region that is experiencing substantial growth as a financial services and fintech hub,” Miela added.

Republic in Ky. sues Green Dot after a deal falls through

Republic Bancorp in Louisville, Ky., has filed a lawsuit against Green Dot after a plan to sell its tax refund solutions business to the prepaid card issuer fell through. 

The $6.2 billion-asset Republic disclosed in a regulatory filing Tuesday that the deal collapsed due to “undisclosed issues” with Green Dot’s primary regulator. Republic said it believes all the conditions established in the purchase agreement would have been satisfied. 

The lawsuit was filed on Oct. 5 in the Delaware Court of Chancery.

Green Dot had been seeking approval from the Federal Reserve.

Republic contends that Green Dot failed to disclose the existence of any regulatory issues that would cause a delay in closing. The bank also claims that approval from Green Dot’s regulator “is not a contractual condition to closing” as defined by the purchase agreement. 

Republic said its lawsuit is looking to require Green Dot to move ahead with the purchase.

The companies announced the planned sale in mid-May, with Green Dot agreeing to buy the business for $165 million. 

Republic disclosed on Aug. 4 that Green Dot had delayed the closing after the card issuer’s regulator requested information tied to the deal. Republic also said that Green Dot had decided to seek approval or a non-objection from its primary regulator.

Arvest in Arkansas to sell 16 branches in four states

Arvest Bank of Fayetteville, Ark., has agreed to sell 16 branches to five different banks.

The $26 billion-asset bank said in a Friday press release that it plans to sell the locations during the first quarter.

Magnolia Banking in Magnolia, Ark., agreed to buy nine branches in Arkansas and Oklahoma. 

Cross County Bank in Wynne, Ark., will buy two Arkansas locations, while FNBC Bank in Ash Flat, Ark., will also acquire a pair of offices in Missouri. 

Generations Bank in Rogers, Ark., is buying a branch in Missouri. RCB Bank in Claremore, Okla., is buying a Kansas branch and an Oklahoma office.

Regions in Ala. to buy small-balance CRE lender

Regions Financial in Birmingham, Ala., has agreed to buy Sabal Capital Partners, a leading originator of small-balance commercial real estate loans. 

The $156 billion-asset company said in a press release Monday that it expected to complete the acquisition in the fourth quarter. It did not disclose the price it will pay. 

Sabal has originated nearly $6 billion in financing. It maintains a $5 billion servicing portfolio. 

Regions said plans to incorporate Sabal into its real estate capital markets division. 

“Regions will become even better positioned to further build on our client base and deliver an expanded range of agency and non-agency options for real estate lending,” Joel Stephens, Regions Bank’s head of capital markets, said in the release. 

“Sabal’s industry-leading technology platform and its leadership in the small-balance commercial real estate arena make the company a great match,” Stephens added. 

Regions said it will keep Sabal’s offices New York, as well as in Irvine and Pasadena, Calif. 

Regions noted that it is not buying Sabal’s investment management business, which will remain with the sellers. Pat Jackson, Sabal’s CEO, and Mike Wilhelms, the company’s chief financial officer, will remain with the investment management business. 

Regions acquired EnerBank USA, a home improvement point-of-sale lender, on Oct. 1. 

Beekman Advisors and Davis Polk & Wardwell advised Regions on the Sabal deal. Wells Fargo Securities and Kramer Levin Naftalis & Frankel advised Sabal.

Community Bank System in N.Y. lines up acquisition

Community Bank System in DeWitt, N.Y., has agreed to buy Elmira Savings Bank in New York. 

The $14.8 billion-asset Community Bank System said in a press release Monday that it will pay $82.8 million in cash for the $648.7 million-asset Elmira. The deal, which is expected to close in the first quarter, priced Elmira at 164% of its tangible book value.

Elmira has 12 branches, $551.2 million of deposits and $465.3 million of loans. 

The acquisition “will enhance and extend our banking footprint in the Finger Lakes Region, across markets which we successfully compete in and aspire to continue to grow our business," Mark Tryniski, Community Bank System’s president and CEO, said in the release.

"This combination will establish a broader and deeper community banking presence in central New York and the Southern Tier and will further enhance our ability to serve these markets,” Tryniski added.

Community Bank System said it expects the transaction to be accretive to its 2022 earnings per share by 8 cents, excluding merger-related expenses. 

Community Bank System plans to cut a third of Elmira's annual noninterest expenses, or $5.8 million. The company expects to incur $11 million of merger-related charges.

Stephens and Squire Patton Boggs advised Community Bank System. Boenning & Scattergood and Vorys, Sater, Seymour and Pease advised Elmira.

Iowa credit union to buy Home Savings in Wisconsin

Dupaco Community Credit Union in Dubuque, Iowa, has agreed to buy Home Savings Bank in Madison, Wis. 

The $2.6 billion-asset Dupaco said in a press release Friday that it will pay between $23.5 million and $24.3 million in cash for the $183 million-asset Home. The deal is expected to close in the second quarter.

Home has two branches. 

“Our combined organization will reinforce the foundation of a credit union that prioritizes the well-being of our members, employees and communities,” Joe Hearn, Dupaco’s president and CEO, said in the release. “We recognize and value Home Savings Bank’s 125-year history, leadership and local market expertise.”

Home is the 11^th bank that has agreed to be sold to a credit union this year. 

Home was advised by Hovde Group and Luse Gorman. Dupaco was advised by Olsen Palmer and Howard and Howard.