TD Bank to buy First Horizon for $13.4 billion

TD Bank Group in Toronto has agreed to buy First Horizon in Memphis, Tenn.

The $525 billion-asset TD said in a press release Monday that it will pay $13.4 billion in cash for the $89 billion-asset First Horizon. The deal, which is expected to close this fall, priced First Horizon at 210% of its tangible book value. 

“First Horizon is a great bank and a terrific strategic fit for TD,” Bharat Masrani, TD’s group president and CEO, said in the release. 

“It provides TD with immediate presence and scale in highly attractive adjacent markets in the U.S. with significant opportunity for future growth" in the Southeast, he added. 

Bryan Jordan, First Horizon’s president and CEO, will become vice chairman of TD Bank Group. 

Leo Salom, group head of U.S. retail for TD Bank Group and president and CEO of TD Bank will lead the combined businesses. 

First Horizon has $55 billion of loans and $75 billion of deposits. 

TD Bank said it does not plan to close any branches. It will also commit $40 million to First Horizon's current charitable program. 

The transaction is expected to be immediately accretive to TD's earnings per share and 10% accretive in 2023. 

TD said it expects to cut a third of First Horizon's annual noninterest expenses, or $610 million. The company expects to incur $1.3 billion of merger-related expenses. 

If the transaction does not close before Nov. 27, First Horizon shareholders will receive an additional 65 cents per share on an annualized basis for the period from Nov. 27 through the day immediately prior to the closing.

First Horizon bought Iberiabank in Lafayette, La., in July 2020 for $3.9 billion.

"In our view, First Horizon's inability to capitalize on selling new products to existing customers ultimately may have triggered its status as a public company," Christopher Marinac, an analyst at Janney Montgomery Scott, said in a note to clients.

"Kudos to management and the board for taking action to secure an alternate cash buyout," Marinac added. 

The transaction will terminate, unless otherwise extended, if it does not close by Feb. 27, 2023. TD Securities, J.P. Morgan, Simpson Thacher & Bartlett and Torys advised TD. Morgan Stanley and Sullivan and Cromwell advised First Horizon.

Amalgamated in NY pulls application to buy similarly named bank

Amalgamated Financial in New York has called off its planned purchase of Amalgamated Bank of Chicago.

The $6.9 billion-asset Amalgamated Financial in New York had agreed in September to buy Amalgamated Bank for $98.1 million in cash. Chicago’s Amalgamated has $1 billion of assets. 

The New York bank said in a press release Friday that it withdrew the merger application for regulatory approval “due to an inability to obtain such approval.” 

Amalgamated in Chicago had a different take in its press release. 

“The terms of our agreement with Amalgamated Financial ... are clear on what triggers termination of this sale,” the Chicago bank said. “They have not met that threshold as the door on addressing issues raised by the FDIC to obtain regulatory approval is still open." 

Amalgamated Financial "has an obligation to address those issues, which we believe are not financial in nature, and move forward with refiling their application with the FDIC," Amalgamated Bank said. "Our goal is to help them overcome the issues that have been raised and we are confident that the sale can get back on track.”

Lynn Fuller to retire as Heartland's executive chairman

Lynn Fuller, a former CEO of Heartland Financial USA, is retiring as the Dubuque, Iowa, company’s executive operating chairman. 

The $19.3 billion-asset company disclosed in a regulatory filing Friday that Fuller, 72, will step down at its 2022 annual meeting. He will remain on Heartland’s board; his current three-year term is set to end in 2024.

Fuller had a large role turning Heartland into the company it is today. He was the company’s CEO from 1999 to 2018. He was CEO of Dubuque Bank and Trust, the company’s Iowa bank, from 1986 to 1999. 

Heartland is in the process of collapsing its 11 bank charters.

Hanover Bancorp in NY files doc for IPO

Hanover Bancorp in Mineola, N.Y., is setting the stage for an initial public offering. 

The $1.5 billion-asset company filed a shelf registration on Wednesday for the proposed IPO. The filing did not provide a timeline or an estimate of how capital would be raised.

Stephens and Piper Sandler would underwrite the offering. 

Hanover said “substantially of the offering’s net proceeds would go to its bank to “enhance regulatory capital to support organic and future potential strategic growth.” The company said it did not have any current plans, arrangements or understandings tied to specific acquisitions.

Cadence pledges $20.7B in community investment

Cadence Bank in Houston has committed $20.7 billion to low- and moderate-income communities as part of the five-year community benefits plan. 

Cadence, which merged with BancorpSouth in Tupelo, Miss., last fall to create a $50 billion-asset bank, said in a press release Thursday that it worked on the plan with the National Community Reinvestment Coalition. 

The plan includes $11.8 billion in residential mortgage loans to low- and moderate-income (LMI) borrowers, LMI geographies and minorities. The bank also pledged $6.5 billion in small business loans to businesses located in LMI census tracts and companies with less than $1 million in gross annual revenues.

The commitment also includes $2.4 billion in community development lending and investments. It also features a commitment to volunteer services, grants and donations, with the possibility of new branches and products. 

"Cadence is dedicated to understanding the financial needs of its communities and providing solutions to help make them stronger," Dan Rollins, the bank’s chairman and CEO, said in the release. The plan "will strengthen our efforts to improve the places we live and work.” 

Cadence agreed in August, prior to the BancorpSouth merger, to pay a $3 million penalty and provide more than $4 million in loan subsidies to address claims of discrimination in its mortgage lending operation.

East Cambridge Savings to buy Patriot Community

The mutual holding company of East Cambridge Savings Bank in Massachusetts has agreed to buy Patriot Community Bank in Woburn, Mass. 

The $1.3 billion-asset 1854 Bancorp said in a press release Friday that it will pay $15.75 a share for the $208 million-asset Patriot Community. The deal is expected to close in the third quarter. 

“Through this merger, we look forward to providing expanded banking services and convenience to consumers and small businesses that have long looked to Patriot Community … for their banking needs,” Gilda Nogueira, East Cambridge’s president and CEO, said in the release. 

“Our organizations, with similar corporate cultures and values, credit our long-term success to the confidence and trust of the many local residents and businesses we serve,” Nogueira added. “We are committed to continuing as a strong financial and community partner.” 

John O’Donnell, Patriot Community’s president and CEO, will join East Cambridge as its senior commercial lending officer. 

Goodwin Procter and The Kafafian Group advised 1854 Bancorp. Griffin Financial Group and K&L Gates advised Patriot Community.

Popular buying its digital bank, applications from Evertec

Popular Inc. in San Juan, Puerto Rico, has agreed to buy its customer experience and key client-facing applications from Evertec.

The $75 billion-asset Popular disclosed in a regulatory filing Thursday that it will pay $197 million for the assets by lowering its stake in Evertec from about 16% to 10.5%. 

The acquisition includes the Mi Banco digital banking platform, cash management online application and other digital customer service applications, Popular said in a slide deck.

The deal is expected to close by June 30.

Popular said it plans to reduce the holdings to below 4.5%, which would eliminate Federal Reserve scrutiny of Evertec tied to the Bank Holding Company Act. 

Popular said it expects the transaction to provide about $16 million in financial benefits in 2023. 

Popular said using Evertec shares as consideration should result in an after-tax gain of about $135 million. The effect of the subsequent sell-down or conversion of Evertec shares to estimated to be $215 million in after-tax gains. 

The “transaction accelerates our digital transformation and increases our control of our customer channels,” Popular added. 

Popular and Evertec also agreed to extend several commercial agreements that had an initial term ending in 2025.

Evertec was once a Popular unit, but the banking company sold a 51% stake in the payments business to Apollo Global Management in 2010. Evertec went public three years later. 

“The deal should be earnings accretive in subsequent years,” Alexander Twerdahl, an analyst at Piper Sandler, wrote in a note to clients. “We view the announcement as a positive for Popular shares as the deal should push earnings higher. and further reduce … share count, while gaining more flexibility for Popular from an operational standpoint.”

Professional Holding in Fla. makes sudden CEO swap

Professional Holding in Coral Gables, Fla., has made an abrupt change in leadership.

The $2.7 billion-asset company said in a press release Thursday that Abel Iglesias has been elected CEO, effective immediately. Iglesias, who joined Professional in 2013, has been its bank’s president since 2016.

Iglesias succeeded Daniel Sheehan, who parted ways with Professional “by mutual agreement,” the company said. Sheehan, who also resigned from the board, had been the company’s chairman and CEO since 2014.

Prior to joining Professional, Iglesias (pictured) was president and CEO of JGB Bank.

Professional said Herbert Martens had replaced Sheehan as its chairman. Martens, a founder of the bank, is a managing partner of Advent Associates, a private investment company.

"Our focus remains on traditional banking,” Iglesias said in the release. “It is how we got here, it is what's made us successful and it is what we believe will allow us to grow and expand in a way that satisfies our shareholders and our customers, as well as the communities we serve.” 

“Sheehan has been instrumental in growing the bank and leading us to become a public company,” Martens said. “He is a gifted entrepreneur and strategic thinker. We wish him the best of luck and thank him for his service." 

"We certainly view today's news as a surprise given the bank seemed to be right on the cusp of a much better profitability profile and ... Sheehan had never hinted at a departure any time soon," Stephen Scouten, an analyst at Piper Sandler, wrote in a note to clients. 

"Sheehan did an admirable job setting the bank up for future success, including recent expansions to Tampa and Jacksonville and the establishment of the search fund business," Scouten added. Iglesias "definitely has a deep understanding of the bank given his tenure at" Professional.

Origin in La. strengthens Dallas ops with acquisition

Origin Bancorp in Ruston, La., has agreed to buy BT Holdings in Quitman, Texas. 

The $7.9 billion-asset Origin said in a press release Thursday that it will pay $313.5 million in stock for the $2 billion-asset parent of BTH Bank. The deal, which is expected to close in the second half of 2022, priced BT Holdings at 151% of its tangible book value.

“I am excited to bring our strong teams together and expand our Texas franchise,” Drake Mills, Origin’s chairman, president and CEO, said in the release.

"These two companies have been passionately committed to community banking for more than 100 years and are deeply rooted in the communities we serve,” Mills added. “I firmly believe that our cultural alignment and shared values provide an ideal combination to drive growth and long-term value for our employees, customers, communities and shareholders.” 

BTH Bank has $1.3 billion of loans and $1.7 billion of deposits. 

The deal should be 12.7% accretive to Origin’s 2023 earnings per share. It should take a little more than two years for Origin to earn back an expected 3.6% dilution to its tangible book value. 

Origin plans to cut about 30% of BT Holdings’ annual noninterest expenses. The company expects to incur $18 million of merger-related expenses. 

Origin, which is nearing $10 billion of assets because of the pending deal, said it stands to lose $5 million of annual interchange fees beginning during the second half of 2024. 

Lori Sirman, BT Holdings’ president and vice chairman, and Jay Dyer, the bank’s executive vice president, will join Origin’s executive team. Two BT Holdings directors will join the Origin board.

Stephens and Fenimore Kay Harrison advised Origin. Piper Sandler and Norton Rose Fulbright US advised BT Holdings.

Texas Capital expands HBCU certificate program

Texas Capital Bancshares in Dallas has expanded its commercial lending certificate program for historically black colleges and universities to include Huston-Tillotson University in Austin, Texas. 

The $34.7 billion-asset Texas Capital, through a partnership with the American Bankers Association, already offers the certificate at Prairie View A&M University in Prairie View, Texas. The program was launched last year. 

Texas Capital, “in collaboration with Huston-Tillotson and the American Bankers Association, aims to provide students with meaningful opportunities and useful skills to pursue careers in the financial services industry,” Rob Holmes, the company’s president and CEO, said in the release. 

“We are focused on empowering the communities we serve by dedicating our commitment and resources to foster a culture of trust through collaboration, inclusion, and respect,” Holmes added.

“Offering a course for our students that provides perspective on commercial lending will be instrumental in their professional and personal development whether or not they pursue a career in banking,” Rohan Thompson, dean of Huston-Tillotson’s School of Business and Technology, said in the release. “Through our partnership ... we hope to continue offering advanced financial courses.” 

The program will cover qualitative analysis and how to assess industry risk, market risk and management risk. It is designed to provide an understanding of the role of loan policy and the need to summarize a borrower’s risks into an appropriate credit risk rating for loan approvals. 

The course also provides guidance on loan structuring and documentation issues. The cost of textbooks is covered by Texas Capital’s arrangement with the ABA.

Ex-FDIC innovation chief: Agencies ill-equipped for tech challenges

The former chief innovation officer at the Federal Deposit Insurance Corp. delivered a stinging criticism of federal banking agencies days after leaving his post.

Sultan Meghji, who resigned from the FDIC on Feb. 18, wrote in an op-ed for Bloomberg that he “found barriers to innovation” at virtually every agency he worked with. He collaborated with the Federal Reserve, the Consumer Financial Protection Bureau, and other federal agencies during his stint at the FDIC. 

Meghji, who held his post for about a year, also expressed concern that existing regulation may be inadequate to address modern technological challenges. 

“Serving in this role was an honor, but my decision to leave was right,” he wrote in the op-ed. “The federal bureaucracy is both hesitant and hostile to technological change. America’s global financial leadership is in jeopardy.” 

Meghji also took issue with the level of knowledge at various federal departments. 

“I estimate that across the agencies I encountered, less than one-tenth of staff had a basic understanding of the technologies they regulate,” he said. “Even senior officials — those who lead regulatory development and implementation — are baffled by concepts like fintech, the dark web and even financial apps.” 

The hiring process is another area of concern, he asserted. 

“The federal hiring process does a poor job of identifying and keeping the best candidates,” he said. 

“I lost track of the number of times I was told to hire someone with few qualifications over a proven technology specialist,” Meghji added. “The government must put applied digital knowledge front and center instead of prioritizing government tenure and unrelated qualifications.”

SoFi to buy cloud-based banking platform for $1.1 billion

SoFi Technologies in San Francisco has agreed to buy Technisys, a cloud-based, digital banking platform.

SoFi said in a press release Tuesday that it will pay about $1.1 billion in stock for Miami-based Technisys. The deal is expected to close in the second quarter. 

“Technisys has built an attractive, fast-growth business with a unique and critical strategic technology that all leading financial services companies will need in order to keep pace with digital innovation,” Anthony Noto, SoFi’s CEO, said in the release. 

The acquisition “is an essential building block in delivering on our member-centric, digital one-stop-shop experience,” Noto added. “Technisys has emerged as a proven leader in Gen 3 multi-product banking core technology.” 

The deal is expected to add $500 million to $800 million of revenue through the end of 2025. Related moves should lower SoFi’s expenses by $75 million to $85 million from 2023 to 2025 and by $60 million to $70 million annually beginning in 2026. 

Technisys is expected to operate as an independent unit with Miguel Santos remaining as its CEO.

Allen & Co. and Wachtell, Lipton, Rosen & Katz advised SoFi. Gunderson Dettmer Stough Villeneuve Franklin & Hachigian advised Technisys.

Auburn National selling land near HQ for $4.3 million

Auburn National Bancorp. in Auburn, Ala., has agreed to sell land next to its corporate headquarters. 

The $1.1 billion-asset company disclosed in a regulatory filing Tuesday that it will part with 0.85 acres of land for nearly $4.3 million. The company said it expects the sale to be accretive to its earnings by about 70 cents a share. 

Auburn National disclosed that the buyer is a bank customer, noting that it hasn’t given the client any favorable terms on loans or deposits and that it adhered to “market terms and conditions” with the planned sale. Auburn National said it is not financing the purchase. 

The buyer has 180 days to conduct due diligence, inspections and reviews.

Five Star Bank entering Baltimore, Washington markets

Financial Institutions in Warsaw, N.Y., is entering the Baltimore and Washington markets after hiring a team of commercial lenders from Howard Bank. 

The $5 billion-asset parent of Five Star Bank said in a press release Tuesday that it hired John Mangan as its Mid-Atlantic president. He previously served as senior vice president and team lead for commercial real estate and facilities management at Howard Bank. 

Howard Bank was recently acquired by F.N.B. Corp. in Pittsburgh. 

Mangan will lead a team of three bankers with commercial lending experience around Baltimore and Washington. The bankers are Mark Cunningham, John Dezinno and Thomas Mee. 

Five Star “is taking advantage of experienced and available talent to expand our commercial lending platform,” Martin Birmingham, Financial Institutions’ president and CEO, said in the release. 

“Our strong track record of credit-disciplined loan growth, combined with well-defined strategic and risk frameworks that guide the evolution of our company, give us confidence in the expected positive outcomes of this expansion beyond our current operating footprint,” Birmingham added.

RBB CEO takes leave as company conducts probe

RBB Bancorp in Los Angeles is conducting a probe tied to its longtime president and CEO. 

The $4.2 billion-asset company said in a press release Tuesday that Alan Thian had taken a leave of absence, effective immediately, pending an internal investigation being conducted by a special committee of its board. 

The company did not disclose the members of the committee or what the group will investigate.

RBB said the board had appointed David Morris, its chief financial officer, to serve as interim president and CEO. Morris will continue in his role as CFO.

Thian has been Royal Business Bank's CEO since its formation in November 2008. He took the same role at the holding company when it was created three years later.

"We do not anticipate a long investigation, but nevertheless we remain sidelined in our rating until there is more clarity in the company's leadership," Ben Gerlinger, an analyst at Hovde Group, wrote in a note to clients. 

Thian's leave of absence is the second time in a week that an RBB executive has stepped away from a post. A week earlier, the company disclosed that Tammy Song, its chief lending officer, had resigned.

"Both announcements are clear negatives for RBB," Nicholas Cucharale, an analyst at Piper Sandler, wrote in his client note. 

"With limited information, it is difficult to discern the degree of downside or the nature of the issue," Cucharale added. "Given the absence of a time frame for resolution, we anticipate an overhang on the shares until incremental information is disclosed."

Georgia's Own Credit Union lines up bank acquisition

Georgia’s Own Credit Union in Atlanta has agreed to buy Vinings Bank in Smyrna, Ga. 

The $3.4 billion-asset Georgia’s Own said in a press release Monday that it will keep all of the $653 million-asset Vinings’ employees. Georgia’s Own, which bought State Bank of Georgia in 2018, did not disclose the price it will pay. 

“We are committed to making this venture a positive one for everyone involved,” Dave Preter, Georgia’s Own president and CEO, said in the release. “Through this alliance, we feel confident that we can deliver added value and exceptional products and services to our members and the community.” 

The deal is the first of 2022 where a credit union plans to buy a bank. There were 13 credit union-bank mergers announced last year.

M&T, People's United extend merger deadline

M&T Bank in Buffalo, N.Y., and People’s United Financial in Bridgeport, Conn., have extended the deadline for their merger agreement by more than three months. 

The $143 billion-asset M&T and the $60 billion-asset People’s United said in a press release Friday that the end date was moved from Feb. 21 to June 1. 

While the acquisition has been approved by the New York State Department of Financial Services and the Connecticut Department of Banking, it has yet to be approved by the Federal Reserve.

“M&T and People’s United both remain committed to the merger and seeking such approval,” the companies said. 

The companies announced the $7.6 billion deal in February 2021.

Solera in Colorado parts ways with another CEO

Solera National Bancorp in Lakewood, Colo., is again looking for a new leader. 

The $651million-asset company said in a press release Friday that Kreighton Reed had resigned as its president and CEO, effective Jan. 24. Peter Lindquist, Solera’s chief credit officer, resigned on Dec. 10.

"We thank Kreighton and Peter for their many contributions to Solera" Mike Quagliano, the company’s chairman, said in the release. "Our team continues to move forward and we are focused on delivering top notch customer service to our customers and executing on technology initiatives that will drive our long-term success." 

Reed became Solera’s interim president and CEO in July when the company terminated the employment of Martin May. May took over those roles in 2015, ending a turbulent period where he became the company's sixth CEO since 2008. 

May helped Solera exit a formal agreement with the Office of the Comptroller of the Currency in 2017. The company’s 2021 earnings were nearly double that of a year earlier, at $11.1 million.

Fintech-focused MVB to unveil new three-year plan

MVB Financial in Fairmont, W.Va., is set to discuss its next three-year plan. 

The $2.8 billion-asset company said in a press release that the plan, called MVB F1, will debut at an investor day in Las Vegas set to take place on March 14-15. 

The fintech-focused MVB recently completed its last three-year plan. Its 2021 earnings rose 4.6% from a year earlier, to $39 million. 

MVB in August said it would increase its stake in Interchecks Technologies, a payment disbursement platform. Interchecks focuses on the gaming industry segments of online sports betting, daily fantasy sports and iGaming. 

In September, MVB announced a partnership to let its fintech clients offer Bitcoin-related products. The collaboration with Victor Technologies and NYDIG, will integrate Bitcoin into MVB’s Banking-as-a-Service (BaaS) offerings.

Capitol Federal reportedly prepping core system upgrade

Capitol Federal Financial in Topeka, Kan., is set up upgrade its core back-office system aa it nears $10 billion of assets.

The $9.6 billion-asset company plans to complete the conversion in September 2023, Andrew Liesch, an analyst at Piper Sandler, wrote in a note to clients following meetings with top executives.

“This new core should allow [Capitol] to introduce more products and services – and at a faster pace – enhancing the customer experience,” Liesch wrote.

Leisch said that management told him that the company’s “loan pipelines are solid, though some recent large paydowns could weigh on net growth this quarter.” Finally, the net interest margin should “exhibit some positive sensitivity to rate increases, as deposit repricing is likely to lag the hikes.”

Middlefield in Ohio selects insider as next CEO

Middlefield Banc in Middlefield, Ohio, will have a new CEO in a few weeks. 

The $1.3 billion-asset company said in a press release Thursday that James Heslop II, its chief operating officer, will also become its president on April 1. He will succeed Thomas Caldwell, who is retiring.

Caldwell will also retire from Middlefield’s board. The company said it will reduce the size of its board from 10 to nine directors when he steps down. 

Middlefield conducted “an extensive search of both internal and external candidates” as part of the process, William Skidmore, the company’s chairman, said in the release. Heslop “is a natural successor and ensures a seamless transition.” 

Heslop joined Middlefield in 1996. From 1993 to 1996, he was president and CEO of First County Bank in Chardon, Ohio.

Truist agrees to buy title insurance company

Truist Financial in Charlotte, N.C., has agreed to buy Kensington Vanguard National Land Services, a title insurance company in New York.

The $517 billion-asset Truist said in a press release that it will integrate its existing unit, BridgeTrust Title, into the Kensington Vanguard platform. Truist did not disclose the price it will pay. 

The acquisition is expected to close by late March. 

"Kensington Vanguard has grown considerably over the past 15 years through a successful strategy built around geographic expansion, talent recruitment, and acquisitions," John Howard, chairman and CEO of Truist Insurance Holdings, said in the release. "Its industry-leading expertise in both the commercial and residential title sectors will enable us to offer title and real estate services across the full market spectrum.”

Zions to buy three Nevada branches from RBC

Zions Bancorp. in Salt Lake City has agreed to buy three branches in northern Nevada from Royal Bank of Canada.

The $65 billion-asset Zions said in a press release that its Nevada State Bank division will gain locations in Reno, Carson City and Minden. Royal Bank of Canada inherited the branches from its 2015 acquisition of City National Bank.

The deal is expected to close in the third quarter. Zions did not disclose the price it will pay. 

Zions will also gain $480 million of deposits and $110 million of loans. 

“It will be business as usual for the clients … while we complete all the necessary transaction details,” Terry Shirey, Nevada State’s president and CEO, said in the release. 

“We look forward to welcoming both City National clients and banking professionals,” Shirey added. Nevada State “is a strong community partner with deep roots in our Nevada soil and more than 60 years of growing and serving the financial needs of our communities.”

Sterling in Mich. to sell hotel-related CRE loans

The turnaround story at Sterling Bancorp in Southfield, Mich., continues. 

The $3.1 billion-asset company said in a press release Thursday that it has agreed to sell a pool of commercial real estate loans to an unnamed buyer. The pool includes 21 loans with an aggregate outstanding balance of $56.8 million. 

The loans, which are primarily secured by single-room occupancy hotel properties, were reclassified as held for sale and written down to fair value at the end of 2021. 

Sterling said it will receive $4.4 million in excess of the loans’ carrying amount. 

“We remain committed to fully remediating the multiple challenges facing the company over recent years,” Thomas O’Brien, Sterling’s chairman, president and CEO, said in the release. 

“Among the challenges has been confronting a large volume of classified loans,” O’Brien added. “This cash sale permanently removes a substantial volume of such loans from our loan book and represents another step in our efforts to restore Sterling’s financial and regulatory standing.”

Sterling has been operating under a formal agreement with the Office of the Comptroller of the Currency since June 2019 tied to Bank Secrecy Act and anti-money laundering compliance.

The company fired several employees and abruptly discontinued a low-documentation mortgage program in December 2019 after discovering alleged fraud. Suspension of the program created a significant revenue hole for Sterling. 

Thomas Lopp, who was named CEO shortly before the mortgage program was discontinued, resigned in May 2020, citing health reasons. A month later, Sterling hired Thomas O’Brien, a veteran turnaround expert, as CEO. 

O’Brien has since closed some branches, returned Sterling to profitability and settled a shareholder lawsuit alleging that disclosures about the company’s residential lending practices violated federal securities laws. 

Sterling implemented numerous corporate governance measures in January to resolve a shareholder demand for change.

Peoples in Ohio to buy equipment leasing firm

Peoples Bancorp in Marietta, Ohio, has agreed to buy Vantage Financial, a nationwide provider of equipment financing. 

The $7.1 billion-asset Peoples said in a press release Wednesday that it will pay $54 million in cash for the Excelsior, Minn., lender. Peoples will also repay about $21 million of recourse debt on behalf of Vantage.

The deal is expected to close next month.

Vantage, which was founded in 2011, offers mid-ticket equipment leases mostly for IT equipment across a variety of industries. The company has about $147 million of lease assets on Dec. 31. 

Vantage will become a subsidiary of Peoples Bank and most of its current leadership and associates are expected to stay after the deal closes, including William Foudray, its co-founder and CEO. 

Bob Murphy, Vantage’s co-founder and chairman, plans to retire. 

Peoples said it expects the deal to be 3% accretive to its 2022 earnings per share and 6% accretive the following year. It should take less than four years for Peoples to earn back a projected 8% dilution to its tangible book value. 

“The addition of Vantage … will allow us to build upon our recent success with our North Star Leasing acquisition, while also becoming a top 100 U.S. leasing business based on combined assets,” Chuck Sulerzyski, Peoples’ president and CEO, said in the release. 

Peoples was advised by Hovde Group and Squire Patton Boggs (US). Vantage and its equity owners were advised by Cherry Tree & Associates and Barack Ferrazzano Kirschbaum & Nagelberg.

Webster to buy cloud-based HSA platform

Webster Financial in Stamford, Conn., has agreed to buy Bend Financial, a cloud-based platform tied to health savings accounts. 

The $65 billion-asset Webster said in a press release Wednesday that it plans to complete the acquisition by the end of March. Webster did not disclose the price it will pay for the Boston company, which helps employers and individuals manage and track their HSAs. 

"This acquisition demonstrates Webster's commitment to enhance HSA Bank's client experience through strategic technology investments," John R. Ciulla, Webster’s president and CEO, said in the release.

Bend, which was founded in 2017, will continue to operate and serve its clients as it does today. Over time its platform will be expanded to include HSA Bank consumers. 

Webster has made a big push into HSAs in recent years, buying JPMorgan Chase’s business in 2015. 

Webster also bought Sterling Bancorp in Pearl River, N.Y., earlier this month. 

Wachtell, Lipton, Rosen & Katz advised Webster on the Bend acquisition.

Live Oak hires exec to manage embedded banking push

Live Oak Bancshares in Wilmington, N.C., has hired an executive to oversee its embedded banking efforts. 

The $8.2 billion-asset company said in a press release Tuesday that Jake Tupa, as head of embedded banking, will report to Stephanie Mann, its executive vice president of corporate development and strategy. 

Tupa previously worked at Choice Financial and Citigroup, where he managed fintech partnerships, technology innovation and digitization efforts.

“We are very pleased to have Jake spearhead our approach to embedded banking,” Mann said in the release. “His experience and skills will accelerate our ability to deliver products and solutions that are seamlessly integrated into the systems small business owners use every day.”

MasterCard hiring push to bulk up crypto, ESG services

Mastercard in Purchase, N.Y., plans to hire more than 500 young professionals to expand its data and services division in a move that includes the creation of consulting groups for open banking and cryptocurrency. 

The payments company said in a press release Tuesday that it will also form a consulting group that will focus on environmental, social and governance (ESG) issues. 

“Payments are just the beginning,” Raj Seshadri, MasterCard’s president of data and services, said in the release.

"This evolution of consulting is in recognition of the changing world and of our changing business,” Seshadri added. “It’s about helping customers navigate today’s challenges and anticipating what’s next.”

Mastercard’s consulting services for banks and merchants include early stage education, risk assessments, and the design of crypto loyalty programs. One focus involves helping central banks explore the design and deployment of central bank digital currencies (CBDCs).

Longview in Illinois to buy neighboring bank

Longview Capital in Newman, Ill., has agreed to buy Farmers Bank of Mt. Pulaski in Mount Pulaski, Ill.

The $665 million-asset Longview said in a press release Tuesday that it will pay cash for the $66 million-asset Farmers Bank. Longview did not disclose the price it will pay. 

The deal is expected to close in the second quarter. 

Farmers Bank has one branch, $59 million of deposits and $16 million of loans. 

"Our companies share similar values and our partnership will reinforce the foundation for an extraordinary community bank that puts our customers, employees and communities first,” David Albin, Longview’s president, said in the release. 

“We look forward to entering an attractive new market that is a logical extension of our existing operations," Albin added. 

Olsen Palmer and Vedder Price advised Farmers Bank. Hinshaw & Culberson advised Longview.

DoorDash forms division to make restaurant loans

DoorDash has formed a division that will make business loans to restaurants. 

DoorDash Capital will allow merchants to use the delivery service’s app to apply for loans that could be used to buy equipment, apply for business and liquor licenses, make payroll and pay rent. 

The company has already made some loans, based on testimonials included on its website. 

“As we continue to listen to our partners and adapt our services and offerings to meet their needs, one key area where they have asked for support is quick and easy access to capital,” Tom Pickett, the company’s chief revenue officer, wrote in a blog post.

Two investor groups back new directors at Republic First

An investor group looking to oust Vernon Hill as CEO of Republic First Bancorp is backing another shareholder’s effort to have three directors added to the Philadelphia company’s board.

George Norcross III, Gregory Braca and Philip Norcross said in a regulatory filing that they intend to support the nominees submitted by Driver Management. They also plan to oppose the $5.4 billion-asset Republic First’s nominees, including Hill. 

Hill is also the company’s chairman. 

The Norcross-Braca group, which recently increased its stake in Republic First to 9.6%, said it has not communicated with Driver and it has no plans to act in concert with the other investor. 

Republic First's board responded to the developments, stating in a Friday press release that it hired Keefe, Bruyette & Woods to advise it on any shareholder proposals. KBW will respond directly to the shareholders.

The board "continues to review the filings ... carefully and objectively," the release said, adding that the board "remains open to any and all proposals to maximize shareholder value."

The Norcross-Braca group wants Braca to replace Hill as CEO. It also wants the company to use its abundance of deposits to make more commercial loans in New York and Philadelphia. 

Driver, which has a roughly 1.2% stake in Republic First, said in December that it would nominate three people to stand for election to the company’s board, including Peter Bartholow, a former chief financial offer at Texas Capital Bancshares.

CNB in Pennsylvania sets stage for next CEO

CNB Financial in Clearfield, Pa., will have a new CEO later this year. 

The $5.3 billion-asset CNB said in a press release Wednesday that Joseph Bower will retire as CEO of CNB Bank on July 1 and the company’s president and CEO on Dec. 31. He has been the company’s CEO since December 2009. 

Michael Peduzzi, the bank’s president and chief operating officer, will succeed Bower. 

Bower “brought a lot of talent and drive to CNB,” Peter Smith, the company’s chairman, said in the release. “His initiatives carried us into many new markets. I thank him for his efforts on behalf of the board and our shareholders.” 

Peduzzi joined CNB last summer after spending five years as chief financial officer of Mid Penn Bancorp.

Colony in Georgia looking to raise $53M in capital

Colony Bankcorp in Fitzgerald, Ga., is looking to sell $52.5 million of common stock. 

The $2.5 billion-asset company said in a term sheet filed on Monday that it has a 15% overallotment option for the offering, which is being handled by Hovde Group and Janney Montgomery Scott. 

Proceeds would be used for general corporate purposes that include supporting growth, investing in Colony’s bank and “other future strategic opportunities.”

Former banker Calk sentenced to year in prison

Former banker Stephen Calk was sentenced by a federal judge to just over a year in prison after he was convicted in a bribery case involving former Trump campaign chairman Paul Manafort. 

Lorna Schofield, a judge representing the Southern District of New York, also assess a $1.25 million fine. Calk, once CEO of Federal Savings Bank in Chicago, also faces two years of supervised release and will be required to perform 800 hours of community service.

The sentence “sends the message that those who corrupt federally regulated financial institutions will be held to account,” U.S. Attorney Damian Williams said in a Monday press release. 

A jury last year found Calk guilty on bank bribery charges tied to about $16 million of loans he approved for Manafort. 

Federal Savings reached a formal agreement with the Office of the Comptroller of the Currency on Oct. 29 that requires the $815 million-asset bank to address its risk management, consumer compliance and anti-money-laundering protocols.

Home BancShares buys $238M yacht loan portfolio

Home BancShares in Conway, Ark., has acquired a portfolio of marine loans from LendingClub. 

The $18.1 billion-asset Home said in a press release Monday that it bought $238 million of performing yacht loans, which will be housed in its Shore Premier Finance division. Home did not disclose the price it paid.

The division now has about $1.1 billion of loans receivable. 

“The marine business has continued to be a strong segment,” Johnny Allison, Home’s chairman, president and CEO, said in the release. “This opportunity allows us to acquire a quality portfolio that complements our marine finance division.” 

The deal comes two years after Home agreed to buy LH-Finance, the marine lending division of People’s United Financial. Home gained about $405 million of loan balances from that acquisition.

Activist investor group ups stake in Republic First

A shareholder group interested in replacing the CEO of Republic First Bancorp has increased its stake in the Philadelphia company. 

George Norcross III, Gregory Braca and Philip Norcross, who raised their stake from 6.6% to 8.8%, reiterated in the Feb. 7 regulatory filing their desire to meet with the $5.4 billion-asset company’s board. 

The investors said they had a “brief and unproductive conversation” with Vernon Hill, who “indicated no interest on his part in any discussions about meaningful change for the benefit of Republic and its shareholders.” 

The shareholders suggested in a Jan. 31 letter to the board that the board replace Hill as CEO with Braca. They also want the company to increase its commercial lending in markets such as New York and Philadelphia.

Fed, OCC to hold hearing on U.S. Bancorp-MUFG Union deal

The Federal Reserve and the Office of the Comptroller of the Currency will hold a public meeting to discuss U.S. Bancorp’s pending purchase of MUFG Union Bank. 

The Fed and OCC said in a press release Monday that they will host a virtual meeting on March 8 at 11 am EST. Members of the public seeking to present oral comments must register by noon on March 1 through the online registration webpage. 

Public meetings for acquisitions are rare, though they were held in 2019 as part of the merger of BB&T and SunTrust Banks that created Truist Financial. 

The Fed and OCC also said they had extended the public comment period for the merger’s applications, which will now be accepted through March 11. 

U.S. Bancorp in Minneapolis agreed to acquire MUFG Union Bank in San Francisco from Mitsubishi UFJ Financial Group for $8 billion of cash and stock. The deal would create a bank with nearly $700 billion of assets.

MidWestOne CEO announces plans to retire

MidWestOne Financial Group in Iowa City is looking for its next CEO. 

The $6 billion-asset company said in a regulatory filing Monday that Charles Funk will retire later this year. He will remain a director. 

MidWestOne said it had hired an executive search firm to identify and evaluate potential successors. 

The company said internal and external candidates will be considered, and that Funk will work with the search firm “to ensure the successful identification of, and transition duties to, a successor.”

Funk has been the company’s CEO since 2008. He has been the bank’s CEO since 2000.

Acting FDIC chair puts M&A, crypto at top of agenda

The acting chairman of the Federal Deposit Insurance Corp. wasted no time indicating a new direction for the agency following the resignation of his predecessor. 

Martin Gruenberg made it clear in a Monday release that the FDIC’s priorities include taking a closer look at cryptocurrency and climate change, reviewing how it vets large bank mergers and finalizing a series of capital rules. 

Gruenberg, who stepped in after the Feb. 4 departure of Jelena McWilliams, also included updates to the Community Reinvestment Act to his list of priorities. 

“The FDIC’s core mission is to maintain stability and public confidence in the U.S. financial system,” he said in the release. “Banking supervision encompasses safety and soundness and consumer protection, both of which are essential to this important mission.” 

Regarding climate change, Gruenberg said the agency will seek public comment on guidance designed to help banks “prudently manage” risks tied to climate change. He also outlined a plan to create an FDIC interdivisional, interdisciplinary working group on climate-related financial risks. 

Gruenberg said “a careful interagency review of the bank merger process is warranted,” while noting that the review process hasn’t been “comprehensively reviewed in 25 years.” 

Banking regulators need to “carefully consider” the risks posed by digital assets before determining “the extent to which banking organizations can safely engage in crypto-asset-related activities,” Gruenberg said. 

Finally, he said federal banking agencies will prioritize implementing the final agreement on capital requirements tied to Basel III.

CF in Ohio expanding equipment finance business

CF Bankshares in Columbus, Ohio, is taking a regional approach to equipment finance. 

The $1.5 billion-asset company recently hired Chad Owens at head of equipment finance to oversee an effort to expand into Indiana, Michigan, Pennsylvania, West Virginia and Kentucky. 

CF said it plans to add and enhance its commercial lending products and capabilities as part of the initiative. 

Owens was previously a vice president at Key Equipment Finance. Before that, he was at Huntington Bancshares.

Another de novo bank proposed for Houston

A group has filed a request to form a new bank in Houston.

Organizers of Houston Bank of Commerce & Trust applied with the Federal Deposit Insurance Corp. on Jan. 31 for deposit insurance.

Mark Jacobs is set to become the bank's president and CEO, according to the application. He recently served as the Houston area president for Regions Bank.

Ryan Edone, chief financial officer of Petroleum Wholesale, would serve as the bank's chairman.

The other organizers are Rebecca Bayless, John Blanchard, James Doyle and Judson Robinson III. 

Organizers plan to raise $33 million to $42 million in initial capital.

This is the second group in recent weeks to disclose plans to form a bank around Houston. 

Organizers of the proposed Texas Traditions Bank applied with the FDIC on Jan. 3 for deposit insurance for a bank to be based in a Houston suburb.

High-profile banking attorney switches firms

Robert Klingler, a veteran banking attorney, has a new law firm. 

Klinger announced in a tweet Monday that he had joined Nelson Mullins Riley & Scarborough as a partner in its financial institution corporate and regulatory group. The move was also reflected in his LinkedIn profile. 

Klinger previously worked at Bryan Cave Leighton Paisner, where he was a banking attorney in the firm’s financial services corporate and regulatory team from 2009 to 2022. 

In his previous role, Klingler focused on helping community banks with capital and strategic planning, mergers and acquisitions and regulatory compliance.

Live Oak to benefit from Fiserv buying Finxact

Live Oak Bancshares in Wilmington, N.C., will record a large one-time gain when Fiserv buys cloud-based core system Finxact. 

Fiserv said in a press release Monday that it will buy the remaining ownership stake in Finxact for about $650 million. 

“We’re accelerating the delivery of innovative digital banking experiences for our clients and elevating their ability to compete in a rapidly changing market,” Frank Bisignano, Fiserv’s president and CEO, said in the release. 

“This transaction complements our Fiserv account processing solutions and expands our opportunities to serve clients by bringing together Finxact’s highly flexible and scalable API-first capabilities with the comprehensive digital financial solutions portfolio and expertise of Fiserv,” Bisignano added. 

The transaction will be a windfall for Live Oak, which expects to realize a pretax gain of about $115 million from the deal. 

Live Oak has a roughly 15% stake in Finxact and Chip Mahan, the bank's chairman and CEO, is on the fintech's board.

The $8.2 billion-asset Live Oak asked Finxact to build an open, real-time core system in 2017, providing some of the initial $12 million in capital to help create the fintech-friendly platform. 

The Finxact core works with software from 14 partners, including Apiture, Marqeta, LexisNexis and Savana. Live Oak converted from Fiserve to Finxact last fall.

Seacoast in Florida combines chairman, CEO roles

Seacoast Banking Corp. of Florida in Stuart has combined the roles of chairman and CEO. 

The $9.7 billion-asset company said in a press release Thursday that Chuck Shaffer, its president and CEO, had succeed Dennis Hudson III as chairman. Hudson, who preceded Shaffer as CEO, will remain on Seacoast’s board. 

“We thank Denny for his outstanding leadership over more than four decades,” Shaffer said in the release. “We are pleased our board will continue to benefit from his deep market expertise and institutional knowledge. … I look forward to continuing to execute our balanced growth strategy.” 

Hudson’s grandfather chartered Seacoast in 1926. His father and uncle led the bank before he become chairman and CEO in 1992.

OceanFirst to buy title insurance agency

OceanFirst Financial in Red Bank, N.J., has agreed to buy a title insurance agency. 

The $11.7 billion-asset company said in a press release Thursday that it will acquire a majority interest in Trident Abstract Title Agency. The deal is expected to close on March 1. 

The deal gives OceanFirst the option to buy 100% of the agency. OceanFirst did not disclose the price it will pay. 

The acquisition “is a natural step for OceanFirst that provides our clients an opportunity for a substantially improved borrowing experience”  Christopher Maher, the company’s chairman and CEO, said in the reiealse. 

“OceanFirst clients will have the option of working with a preferred title partner that should provide for faster and more straight-forward loan closings,” Maher added. “In addition, adding new revenue streams will provide a quality source of noninterest income to benefit OceanFirst stockholders.” 

Turk & Co. and Giordano, Halleran & Cielsa advised OceanFirst. Collins, Vella & Casello advised Trident.

Minnesota de novo gets conditional FDIC approval

The Federal Deposit Insurance Corp. has given conditional approval for a proposed bank in Bloomington, Minn. 

Organizers of EntreBank must raise $32 million before opening the bank, according to the FDIC’s Jan. 27 approval.

Organizers applied with the FDIC for deposit insurance in August. They changed the proposed bank’s name from Brava Bank to EntreBank. 

The bank would operate as a unit of Entrepreneurs Bancshares. The principal shareholder would be the Entrepreneurs Bancshares Revocable Trust of Daniel A. Boeckermann. 

Daniel Boeckermann would serve as the bank’s chairman, while Timothy Viere would be the CEO.

Kentucky First adds its former bank CEO to its board

Kentucky First Federal Bancorp in Frankfort has added a former CEO of its bank to its board. 

The $337 million-asset parent of First Federal Savings and Loan of Hazard said in a press release Wednesday that Lou Ella Farler is its newest director. 

Farler was president and CEO of First Federal from 2012 to 2018, when she retired. She has been on the bank’s board since 2011. 

Farler’s “wise counsel and guidance, the experience she offers the company from her distinguished career … and her commitment and knowledge to Hazard, one of our company’s core markets, makes her an excellent addition,” Don Jennings, the company’s president, said in the release. 

“The board could not have found a person who engenders more respect and admiration from both members of her community and from those she has worked with in the company through the years,” Jennings added.

Austrian group agrees to buy Idaho bank

BAWAG Group in Vienna, Austria, has agreed to buy Peak Bancorp in McCall, Idaho. 

The $555 million-asset parent of Idaho First Bank said in a press release Wednesday that BAWAG is paying $65 million. 

BAWAG, which offer financial services in Europe through various brands and delivery channels, will work with the bank’s existing leadership team continue expanding in Idaho and adjacent markets. 

“We are extremely excited about the opportunity to join BAWAG Group, and are proud to be a focal point for its U.S. expansion efforts,” Todd Cooper, Peak’s president and CEO, said in the release. 

"This partnership will allow us to continue serving our markets with a community first focus,” Cooper added. “We will be able to leverage BAWAG’s resources, depth, and diversification to better serve our communities and banking customers, while also providing exceptional value to Peak … shareholders.”