Savi Financial outlines plans for de novo bank

Savi Financial in Mount Vernon, Wash., is planning a complicated process to form a de novo and become a multibank holding company.

The parent of the $494 million-asset SaviBank detailed its plan in an application with the Federal Deposit Insurance Corp. for deposit insurance for Orca Bank. 

Savi plans to raise $1 million from Orca organizers and directors, selling about 91,000 shares at $11 each, and contribute another $14 million of capital as part of the reorganization process. 

Orca would buy “substantially all of the business, assets, deposits and related liabilities” of an existing SaviBank branch in Bellingham, Wash. The application noted that “any low-quality assets” would not change hands. 

The branch had $64.4 million of deposits in mid-2021, according to the FDIC. 

Savi would then acquire Orca, exchanging its stock for that of the de novo. It would operate separately from SaviBank.

“The organizers believe that creating a separately chartered institution … offers opportunities to the company to enhance its banking services to its Whatcom County customers by operating Orca Bank as a separate community bank with its own local board of directors and management team, strategy and decision-making,” the application said. 

Savi also believes the structure will increase its customer base, earnings and revenues around Whatcom County. Savi noted in the application that Orca will maintain a loan-loss allowance of 1% to 1.5% of outstanding loans. 

Savi said it expects the new bank to open by Aug. 22. 

Michal Cann, Savi’s chairman and president, would serve as Orca’s CEO. Andrew Wilkens would relinquish his title as SaviBank’s senior vice president to become Orca’s president.

Republic in Ky. to create tech incubator

Republic Bancorp in Louisville, Ky., plans to invest $5 million in tech startups after creating an incubator program. 

The $6.3 billion-asset company plans to launch its BankTech Incubator to back technology companies that complement its strategic goals. To qualify, companies must have an existing or planned strategic relationship with the bank. 

Republic’s investment committee represents a wide variety of employees representing key areas across the bank. The bank has not yet made any investments.

The incubator “allows us to create long-term partnerships with technology companies and share deep industry knowledge that influences the technology we use within the bank,” Andrew Trager-Kusman, Republic’s chief strategy officer, said in a press release.

“We see value in investing in companies with which we also have a strategic relationship,” Trager-Kusman added. “These types of relationships will be truly symbiotic.” 

Republic hired Jeff Starke as its chief information officer last year, and the company has already installed 90 interactive teller machines (ITMs) across its five-state footprint.

"We’re going to be very thoughtful and selective to ensure the … portfolio allows us to better serve the needs of our clients, as well as the bank,” Trager-Kusman said. “We’re confident this initiative will allow us to deepen our existing strategic relationships while we continue to develop new relationships in undiscovered areas.”

Beach in Fla. tried to find a CU buyer, filing says

Beach Bancorp in Fort Walton Beach, Fla., made overtures to more than a dozen credit unions before agreeing to sell to First Bancshares in Hattiesburg, Miss.

The $6.2 billion-asset First agreed to buy the $620 million-asset Beach in April for $117 million. 

Months earlier, Beach, through its investment bank, contacted 16 potential credit union buyers as part of its sales process, according to a regulatory filing tied to the pending acquisition. 

Though seven credit unions signed nondisclosure agreements to access confidential data, none advanced the dialogue due to either poor timing, incompatible geography or less-than-ideal financial considerations. 

Beach decided to seek a buyer in October 2021 after its board held a special strategic planning session.

The bank's board and management spent most of November preparing by, among other things, finalizing a targeted buyers’ list, completing marketing materials and preparing due diligence information. 

The goal was to contact banks and credit unions with $1 billion to $25 billion of assets.

Conversations between First and Beach began on Nov. 4 when Hoppy Cole, First’s president and CEO, informally met with Chip Reeves, Beach’s CEO, at a banking conference. They discussed organizational culture and history, business lines and strategy and views on the industry outlook and future plans. 

Efforts to discuss a deal with credit unions began a couple of weeks later. Reeves and Carl Chaney, Beach’s chairman, also contacted “four active and well-known buyers” beginning in early January.

Chaney and Reeves discussed M&A with Cole and the CEO of an unnamed bank with more than $20 billion of assets during separate meetings in Tampa, Fla., in early January. First and the other bank signed nondisclosure agreements shortly afterward.

After this initial round of outreach, First was the only suitor ready to provide a nonbinding letter of intent, the filing said. First sent its initial letter of intent to Beach on Feb. 18, but the filing did not provide any details. 

Chaney, Reeves and two other Beach executives met remotely on Feb. 23 with executives from a $1.3 billion-asset credit union based in the Mid-Atlantic region. But Beach learned that the credit union did not yet have “consensus level” board backing and that the “regulatory approval process was unproven and not certain,” the filing said. 

The credit union never sent Beach an indication of interest. 

First and Beach went back and forth on First’s letter in late February, with First agreeing to consider adding a Beach director to its board. Reeves signed the letter on Feb. 28. 

After reverse due diligence, Beach’s board discussed an unrealized loss in First’s bond portfolio, deciding that it “was on par with peers and mitigated through strength of earnings, balance sheet liquidity and of no material impact to regulatory capital levels.” 

Beach’s board approved the merger during an April 21 meeting. The deal, which was announced on April 26, is expected to close by the end of this year. It priced Beach at 143% of its tangible book value.

“We are thrilled to be joining forces with Beach Bank and continuing to grow our presence in Florida,” Cole said in a press release announcing the deal. “In addition to strengthening our northwest Florida markets, Beach will add the Tampa metro and central Florida area to our footprint.” 

The deal is expected to be 2.3% accretive to First’s 2023 earnings per share, and 4.7% accretive the next year. It should take less than two years for First to earn back less than 1% dilution to its tangible book value.  

First plans to cut half of Beach’s annual noninterest expense, or roughly $8.2 million. It expects to incur $12.3 million of merger-related expenses. 

Reeves is set to become executive vice president of corporate strategy at First after the deal closes. He will receive an annual salary of nearly $320,000 and be eligible for an annual bonus of up to 10% of that base salary, the filing said. 

First will pay Reeves nearly $1.2 million to extinguish his employment agreement at Beach. Reeves also agreed to an 18-month noncompete agreement and a three-year non-solicitation agreement beginning whenever his employment at First ends.

Ponce in N.Y. hires HSBC exec as next CFO

Ponce Financial Group in Bronx, N.Y., has reshuffled its executive ranks.

The $1.7 billion-asset company said in a press release Tuesday that it had hired Sergio Vaccaro as its chief financial officer, effective June 1. Vaccarro previously served as CFO of Private Bank Americas at HSBC.

Vaccaro will succeed Frank Perez, who will become Ponce’s chief investor relations officer. 

“We are grateful to Frank for his leadership in our mutual-to-stock conversion efforts,” Carlos Naudon, Ponce’s president and CEO, said in the release. 

“Now that we are a fully public minority depository institution and a community development financial institution, we need Frank’s full-time effort dedicated to our becoming a preferred investment for similarly mission-driven investors,” Naudon added. 

The changes come several weeks after the company hired Luis Gonzalez Jr. as its chief operating officer. Gonzalez held several posts at the Office of the Comptroller of the Currency over 15 years, at one point serving as acting assistant deputy comptroller.  

Ponce also disclosed last month that it recorded a $6.3 million charge in the first quarter tied to unsecured microloans originated by a fintech partner. Ponce, which also added $1.7 million to reserves, reported a quarterly loss of $6.8 million.

PNC taps next head of retail banking

PNC Financial Services Group in Pittsburgh will soon have a new head of retail banking. 

The $552 billion-asset company said in a press release that Alex Overstrom will take over the post on July 1. He will succeed Karen Larrimer, who is retiring. 

Larrimer has led retail banking at PNC since July 2016. She has overseen the company’s digital expansion, several rebranding efforts and the creation of solution centers in expansion markets.

Overstrom, who has been with PNC eight years, has served as head of merchant services, head of aviation finance and chief operating officer of corporate and institutional banking and asset management. 

Overstrom helped lead the enterprise integration and conversion of BBVA USA. He will report directly to William Demchak, the company's chairman, president and CEO.

BancCentral in Oklahoma to sell Kansas branches

BancCentral in Alva, Okla., is selling its only branches in Kansas to Plains Bancshares in Plains, Kan.

The parent of the $295 million-asset Plains State Bank will gain two locations in Harper County in a deal expected to close this fall. 

The price was not disclosed. 

The branches had $131.7 million of deposits in mid-2021, according to the Federal Deposit Insurance Corp. 

Plains bought Bank VI in Salina, Kan., in 2018.

First Financial in Ohio to cut overdraft fees

First Financial in Cincinnati is the latest bank to announce plans to address overdraft fees. 

The $16 billion-asset company said in a press release that it will take a series of steps, beginning on June 1, to eliminate or reduce fees. 

The company said it will eliminate nonsufficient funds fees when an item is returned unpaid and notification fees when an account remains overdrawn. Other fees will be reduced.

"We understand that there are times in life when an interruption in income or unanticipated expenses may present challenges,” Archie Brown, the company’s president and CEO, said in the release. 

"We want to help clients rebound from these difficult moments and improve their financial futures, and [we] believe these broad changes to overdraft fees can help provide this assistance,” Brown added. 

John Rodis, an analyst at Janney Montgomery Scott, wrote in a research note that the changes are expected to cut overdraft fees in half. He observed that First Financial generated about $14.6 million of overdraft fees in 2021, accounting for 2.3% of total revenue.

BNY selling business to Franklin Templeton

Bank of New York Mellon has agreed to sell BNY Alcentra Group Holdings to Franklin Templeton.

The $440 billion-asset Bank of New York Mellon disclosed in a regulatory filing Tuesday that Franklin Templeton will pay $350 million in cash at closing, and up to $350 million in contingent consideration, for the business. 

The deal is expected to close in the first quarter of 2023. 

Franklin Templeton has also committed to buy all seed capital investments from the Bank of New York Mellon tied to Alcentra which, as of March 31, were valued at about $305 million. Those investments will be valued at the time of close to determine the final purchase amount. 

Bank of New York Mellon said that, at closing, the sale should increase its common equity Tier 1 capital by about $500 million.

South State in Florida whittles down its board

South State in Winter Haven, Fla., has reduced the size of its board by nearly a third. 

The $46.2 billion-asset company disclosed in a regulatory filing that it cut the board’s size from 19 directors to 13 after six members reached its mandatory retirement age. 

The smaller board “will serve the best interests of the company’s shareholders by providing a more streamlined governing body, as well as providing each director a greater opportunity to be more involved in affairs of the board and the company,” the filing said. 

The newly retired directors – Robert Demere Jr., John Holcomb III, Robert Horger, Charles McPherson, Ernest Pinner and Kevin Walker – have been appointed to an advisory board.

South State also said its board approved the accelerated vesting of 935 restricted stock units that were granted to the directors earlier this month. The board also approved the accelerated vesting of 815 restricted shares granted to Horger in January.

Seacoast-Apollo exclusively negotiated their merger

Seacoast Banking Corp. of Florida’s courtship of Apollo Bancshares in Miami began last summer, leading to exclusive negotiations between the two companies.

The $10.9 billion-asset Seacoast announced its $168.3 million acquisition of the $1 billion-asset Apollo on March 29. Apollo had agreed in 2019 to sell itself to Suncoast Credit Union but the deal was terminated in the early days of the coronavirus pandemic. 

Conversations that led to the Seacoast deal began in August 2021 when Chuck Shaffer, Seacoast’s chairman and CEO, met with Eddie Arriola, his counterpart at Apollo, according to a regulatory filing for the pending transaction. During the meeting, the bankers discussed Seacoast’s interest in a deal, along with potential terms.

Seacoast signed a confidentiality agreement on Dec. 27 to receive access to confidential information about Apollo. 

Seacoast on Jan. 5 sent a proposal that valued Apollo at $177.5 million. A letter of intent was signed on Feb. 10, granting Seacoast exclusivity to negotiate with Apollo until April 15. 

Seacoast conducted due diligence in February and March, while Apollo handled its reverse due diligence in March. The boards of both companies approved the merger on March 29. 

Seacoast expects the deal to be 8% accretive to its 2023 earnings per share. It should take a little more than two years for Seacoast to earn back an expected 2.5% dilution to its tangible book value.  

Seacoast plans to cut about 39% of Apollo's annual noninterest expenses. The company expects to incur about $16 million of merger-related expenses. 

“The proximity of [Seacoast] and Apollo and the logical geographic scope of the combined bank should position the combined bank for continued organic strategic growth in the combined market area,” the recent filing said. 

“This merger creates an excellent opportunity to expand [Seacoast’s] presence in the Miami … banking market and continue expanding in key markets,” the filing added. 

Arriola will serve as Miami-Dade market executive, based on his employment agreement with Seacoast. He will receive an annual base salary of $325,000 and will be eligible in 2022 for a bonus of at least $165,000, the filing said. 

Seacoast disclosed that the aggregate value of Arriola’s vested stock award, restricted stock award and change-in-control payment will be almost $4.3 million.

Savi Financial looks to form second bank

A bank holding company in Washington state wants to open a second bank. 

Savi Financial in Mount Vernon, Wash., has applied with the Federal Deposit Insurance Corp. for deposit insurance for the proposed Orca Bank. Savi is already the parent company for the $494 million-asset SaviBank. 

Savi said in a press release Thursday that Orca would buy SaviBank’s branch in Bellingham, Wash. 

“The formation of Orca Bank came from a local group of community-minded businesspeople from Whatcom County, with the help of Savi,” Michal Cann, Savi’s chairman and president, said in the release. 

“This standalone community bank is focused on serving the communities in Whatcom County,” Cann added. “This transaction will enable us to better serve the banking needs of Whatcom County, with a local board … and management making local decisions.” 

Cann would serve as Orca’s chairman and CEO, while Drew Wilkens would be its president. 

Orca's organizers, based on a public notice, are Cann, Wilkens, Lydia Bennett, Keith Carpenter, Julian Greening, Rogan Jones, Chester Lackey, Manuel Llanos, Regan Walker Sayres, Ali Taysi and Richard Tremaine.

Republic First barred from naming new chairman

Republic First Bancorp in Philadelphia has been barred from appointing a new chairman.

Judge Paul Diamond of the Eastern District of Pennsylvania ruled on Thursday that a decision to replace Vernon Hill with Harry Madonna violated state law and the $5.7 billion-asset company’s bylaws and articles of incorporation. 

Diamond also appointed Alfred Putman of Faegre Drinker Biddle & Reath to serve as custodian to assume control of Republic First, convene a special shareholder meeting by July 10 to fill a vacancy and return company control to the full board. 

The judge's ruling called the decision to remove Hill as chairman “oppressive conduct.”

"It appears that the Madonna Faction seeks to wrest immediate control of Republic First by abruptly firing executives and changing management at the very highest levels," Diamond said in his ruling. The company’s bylaws and articles of incorporation “likely do not allow these actions, which are thus ultra vires or unjust." 

Four directors ousted Hill as chairman after the sudden death of Theodore Flocco Jr., a Hill ally. Flocco's passing led to a power shift on the divided board, allowing the faction opposed to Hill to remove him.

"I look forward to continuing to work with the board and our employees and creating value for our constituents," Madonna, who was named interim chairman, said in a release announcing the change.

Republic First still faces pressure from two investor groups. 

A group led by George Norcross and George Braca has been seeking to remove Hill from his management roles.  

The Norcross-Braca group offered to buy the company on the condition that Hill is no longer involved with it. 

Driver Management, another shareholder, wants to replace three board members, including Hill. 

Republic First recently said it would need to delay its annual meeting while conducting a probe into related-party transactions, a move that has drawn objections from the investors.

Former TCF exec retiring from Huntington

Huntington Bancshares in Columbus, Ohio, said that a key executive it gained from its acquisition of TCF Financial is planning to retire. 

The $178 billion-asset Huntington disclosed in a regulatory filing that Thomas Shafer will step down as co-president of its commercial bank on June 30. He will fully retire from the company on Dec. 31. 

Scott Kleinman will be the sole president of the commercial bank on July 1. 

Shafer was vice chairman of TCF Financial and CEO of TCF National Bank when it was bought by Huntington in June 2021.

Middlefield to enter NW Ohio with Liberty deal

Middlefield Banc Corp. in Middlefield, Ohio, has agreed to buy Liberty Bancshares in Ada, Ohio. 

The $1.3 billion-asset Middlefield said in a press release Thursday that it will pay $64.4 million in stock for the $437 million-asset Liberty. The deal, which is expected to close in the fourth quarter, priced Liberty at 115% of its tangible book value. 

Liberty has six branches, $297 million of loans and $379 million of deposits. 

Liberty “complements our growth in the central Ohio market, and expands our footprint to the compelling northwest Ohio market,” James Heslop II, Middlefield’s president and CEO, said in the release. 

“We believe this is a compelling transaction that generates meaningful earnings per share accretion, has a minimal tangible book value dilution and manageable earn-back period,” Heslop added. 

Ronald Zimmerly Jr., Liberty’s president and CEO, will become Middlefield’s president, assuming shareholders approve amendments to the company’s regulations to split the roles of president and CEO. 

Three Liberty directors will join Middlefield’s board. Those additions would be Zimmerly, Liberty Chairman Mark Watkins and Spencer Cohn, a representative of Castle Creek Capital, Liberty’s biggest shareholder. 

Castle Creek Capital will own about 7% of Middlefield after the deal closes. 

Middlefield said it expects the transaction to be 5.6% accretive to its 2023 earnings per share. It should take three years to earn back an estimated 3% dilution to tangible book value. 

Middlefield plans to cut about a third of Liberty’s annual noninterest expenses. The company expects to incur $7 million of merger-related charges. 

Keefe, Bruyette & Woods and Grady & Associates advised Middlefield. Raymond James and Vorys, Sater, Seymour and Pease advised Liberty.

M&T creates $25M fund for New England, New York

M&T Bank in Buffalo, N.Y., has created a $25 million philanthropic fund tied to its recent acquisition of People's United Financial in Bridgeport, Conn. 

The $63 billion-asset M&T, which completed the purchase in April, said in a press release that the Amplify Fund will support People's United communities in New England and New York. 

Amplify is a one-time supplemental charitable program that will be deployed over three years to benefit low- and moderate-income communities and underrepresented populations. 

"Investing in communities by understanding their specific needs and issues is the hallmark of our approach as a community-focused bank,” Mike Keegan, M&T’s head of community banking, said in the release. 

“Input from local leaders and community organizations will continue to be key to our success, as we bring our collective influence and resources together to make a meaningful difference in people's lives," Keegan added. 

The fund, which builds off M&T’s $43 billion community growth plan, will focus on community development and innovation. Regional bank representatives will continue to meet with local leaders to determine the fund’s strategic direction. 

M&T plans to initially deploy $9 million to $11 million this year, with the remaining deployment taking place in 2023 and 2024.

Iowa credit union buys digital insurance business

Collins Community Credit Union in Cedar Rapids, Iowa, has acquired the digital insurance business of Coverage Direct in Des Moines, Iowa. 

The $1.5 billion-asset credit union said in a press release that it folded the business into its family of Credit Union Service Organizations (CUSOs). The price was not disclosed. 

Coverage Direct, founded in 2016, is led by Zach Mefferd and Ryan Swalve. 

"We … pride ourselves with being able to offer cutting-edge technology like the largest insurance agencies, but with the added component of a service team who prioritizes being genuine and caring," Mefferd said in the release. 

“With this partnership and being a CUSO, that gives us an even better platform to serve the credit union industry," Mefferd added. 

"Being structured as a CUSO allows greater proceeds to return back to the credit union partners,” Stefanie Rupert, the credit union’s president and CEO, said in the release. 

“There are options for credit unions to own their book of business or receive proceeds of the policies placed,” Rupert added. “It's really the ideal scenario.”

FDIC drops banker-supported appeals process

The Federal Deposit Insurance Corp. has eliminated a short-lived appeals process that had the backing of bankers. 

The Office of Supervisory Appeals, formed before President Biden took office, had become fully staffed on Dec. 6. The standalone office was intended to act as an internal court where banks could appeal supervisory findings by examiners. 

The agency’s board recently disbanded the office and restored the preexisting Supervision Appeals Review Committee. The board also removed a provision requiring that all communication between the office and supervisory staff be shared in writing with the bank that filed an appeal. 

The FDIC, which made the decision in a closed session, is now accepting comments as part of a 30-day process.

The Independent Community Bankers of America recently took issue with the moves. 

“Community banks did not have a meaningful chance to utilize the Office of Supervisory Appeals,” the association said in a press release. 

“We are disappointed the FDIC board … summarily eliminated this independent forum for appeals without providing the public an opportunity to comment beforehand,” the association added. “Without a bipartisan FDIC board, the agency’s decision to reconstitute board-level review using the SARC calls into question its commitment to a more independent supervisory appeals process.”

Credit union hires veteran banker as COO

IC Federal Credit Union in Fitchburg, Mass., has hired a veteran banker as its chief operating officer.

CarrieAnne Cormier announced on her LinkedIn account that she is joining the $574 million-asset credit union. 

Cormier had spent the previous 17 years at Avidia Bank in Hudson, Mass. She had been the $2.4 billion-asset bank's senior vice president of retail operations and strategy since 2014, where she oversaw a 10-branch network.

"It's an honor to be joining this amazing organization as we gear up for some exciting growth!” she wrote. “I am incredibly blessed for my time [at Avidia] and for this new adventure that will bring me closer to my hometown.”

Kansas City Fed President Esther George to retire

Esther George is set to retire as president and CEO of the Federal Reserve Bank of Kansas City.

The Kansas City Fed announced that George will retire in January. George, who has been in the post for 11 years, is set to reach the central bank’s mandatory retirement age of 65.

Egon Zehnder, an executive recruitment firm, was hired to asset the Kansas City Fed in its search for a successor. A search committee comprised of Kansas City Fed directors who are unaffiliated with the banking industry was also formed to aid in the process.

Charles Evans, who is also set to become 65, is also retiring. 

Several other key Fed posts are set to change. 

Susan Collins will become president of the Boston Fed in July, while Lorie Logan will take over the same post at the Dallas Fed a month later.

Denver Community Credit Union rebrands as Zing

Denver Community Credit Union in Colorado has rebranded as Zing Credit Union.

The $457 million-asset credit union said in a press release that it had considered rebranding since 2017 when it began to include more communities and members beyond Denver.

“Interviews and focus groups guided the decision,” the credit union, which was formed in 1934, said in the release. “This is a decision that was not taken lightly and was evaluated for the future opportunities a name change offers.”

Heartland in Ohio adds politician to its board

Heartland BanCorp in Whitehall, Ohio, has added the state’s lieutenant governor to its board. 

The company said in a press release that Jon Husted became a director on May 17. He joined the $1.4 billion-asset bank’s board in March. 

Husted “brings an enormous amount of knowledge, relationships and experience that will be beneficial to the board as we continue to grow our franchise throughout Ohio,” Scott McComb, Heartland’s chairman, president and CEO, said in the release. 

“His calculation and strategic decision-making skills complement our already diverse and accomplished board,” McComb added. 

“Heartland is a great community bank, and I look forward to adding value to the way they serve the small businesses and families that count on them for their financial service needs,” Husted, a Republican who is running for reelections, said in the release.

CEO of Northwest Bancshares in Ohio dies

The president and CEO of Northwest Bancshares in Columbus, Ohio, has died. 

The $14.4 billion-asset company said in a press release Wednesday that Ronald Seiffert, 65, died unexpectedly of natural causes. He was also the company’s chairman. 

Northwest said that William Harvey Jr., its chief financial officer, was named interim president and CEO. Timothy Fannin, the company’s lead director, was named interim chairman. 

“Bank employees have been informed of the news and Northwest representatives are sharing the news with business and community organizations,” the release said.

“Ron was a friend to everyone at Northwest and the communities that we call home,” Fannin said in the release. 

“We mourn for his family and wish them peace during this most difficult time,” Fannin added. “Ron was passionate about Northwest and committed to making a difference.” 

Seiffert joined Northwest in November 2017 as president and chief operating officer. He became the company’s CEO in June 2018. Before joining Northwest, Seiffert was chairman, president and CEO of Delaware County Bank & Trust in Lewis Center, Ohio.

Farmers and Merchants in Md. names next CEO

Farmers and Merchants Bancshares in Hampstead, Md., has found a successor for its retiring CEO.

The $718 million-asset company said in a press release Tuesday that Gary Harris will become its president on July 1. He will succeed James Bosley Jr. as CEO at the end of this year. 

Farmers and Merchants worked with Kaplan Partners, a Philadelphia executive recruitment firm, on the search process, which evaluated bankers from Boston to Atlanta. 

Harris joined the company in 2008. He has been its chief lending officer since 2021. 

“After a thorough search, the board is very confident in its selection of Gary Harris as our next president,” Bruce Schindler, the company’s chairman, said in the release. 

Harris “has demonstrated strong leadership qualities along with being a top producer for the bank for many years,” Schindler added. “The board looks forward to working with him.”

Integro Bank gets conditional FDIC approval

Organizers of Integro Bank in Phoenix have cleared another major hurdle. 

The group said in a press release that it has received conditional approval from the Federal Deposit Insurance Corp. Organizers must raise at least $27.9 million before being cleared to open. 

Integro received conditional approval from the Arizona Department of Insurance and Financial Institutions earlier this month. 

"Combining this federal regulatory approval with our state regulatory approval and our recently obtained bank routing number means the primary remaining item to open the bank is to close on our pending stock offering,” Thomas Inserra, the proposed bank’s CEO, said in the release. 

“Our mission of helping small businesses grow and increase employment is about to begin,” Inserra added. Integro will “begin hiring the remaining positions to open the bank in preparation for our rapid launch." 

The plan is to open the bank in mid-2022.

Top bank associations oppose US CBDC

The nation’s biggest banking associations are opposed to the creation of a U.S. Central Bank Digital Currency (CBDC). 

The Federal Reserve had been seeking comments on whether or not to pursue a US CBDC, though the central bank has said it would prefer a legislative mandate before going down that path. The comment period ended on Friday. 

The American Bankers Association, Independent Community Bankers of America and the Bank Policy Institute expressed concerns that a US CBDC would take much-needed deposits out of the banking system. 

The ABA noted in its comment letter that retail deposits comprise roughly 70% of all bank funding.

"As we have evaluated the likely impacts of issuing a CBDC, it has become clear that the purported benefits of a CBDC are uncertain and unlikely to be realized, while the costs are real and acute,” the ABA said. 

“A CBDC likely would undermine the commercial banking system in the United States, and severely constrict the availability of credit to the economy in a highly procyclical way,” especially “during a period of economic stress,” the Bank Policy Institute asserted in its letter.

The ICBA, in announcing its opposition, expressed a belief that a US CBDC could create issues around privacy and cybersecurity. 

“A U.S. CBDC appears to be a solution in search of a problem,” ICBA President and CEO Rebeca Romero Rainey said in a press release. 

"While ICBA supports the [Fed’s] efforts to ensure the U.S. payments and monetary system remains modern and competitive, a U.S. CBDC would introduce costs and risks far exceeding any benefits to consumers, small businesses and the broader economy,” Romero Rainey added.

South State in Florida to close 30 branches

South State in Winter Haven, Fla., is planning to close 30 branches. 

The $46 billion-asset company disclosed in a regulatory filing Tuesday that 16 of the closures will be in Florida, six in South Carolina, five in Georgia and the rest in Virginia and North Carolina. 

The branches represent about 10.5% of the company’s branch network, based on the number of locations it had in mid-2021. 

South State said the closures were part of an “ongoing evaluation of customer service delivery and efficiencies, particularly in light of the changing foot traffic and customer practices … because of the COVID-19 pandemic.” 

The decision also reflected cost structure, and an “assessment that the communities in the markets impacted can be served by remaining branch locations located there.” 

South State plans to close the branches in the third quarter. 

The effort should save the company $10 million annually, beginning in 2023. South State expects to incur $8 million of one-time costs tied to the closures.

JPMorgan Chase hires exec to lead fintech effort

JPMorgan Chase has hired a former PayPal executive to serve as its head of fintech partnerships for its commercial bank. 

The $4 trillion-asset company said in a press release that it had hired Peggy Mangot to fill the position. She will oversee a team that will design, develop and implement strategies. 

Mangot was in charge of leading investments in fintech, commerce, infrastructure and crypto for PayPal Ventures. Prior to joining PayPal, she led the development of Wells Fargo’s challenger bank and its enterprise management platform. 

"Couldn’t be more thrilled,” Mangot said in a tweet. “I look forward to deepening relationships with all of you builders and investors.”

FDIC watching banks' balance sheets: Gruenberg

The Federal Deposit Insurance Corp. is paying closer attention to banks’ balance sheets after rising interest rates led to higher levels of unrealized losses in securities portfolios. 

While the banking industry has “high liquid asset levels,” Martin Gruenberg, the FDIC’s acting chairman, said in a Tuesday press release that “elevated levels of unrealized losses could increase the risk of actual losses should banks sell investments at a loss to meet liquidity needs in the future.”

Higher rates could also cut into real estate values and make it harder for some borrowers to repay their loans, Gruenberg noted in the release, which is tied to the FDIC’s Quarterly Banking Profile. 

“We’re particularly focused on commercial real estate and other assets that are being held on the books of the banks,” he said. 

Industry profits fell by 22.2% in the first quarter from a year earlier, to about $59.7 billion. The FDIC said nearly two-thirds of banks reported a year-over-year decrease in quarterly net income.

The aggregate loan-loss provision swung to a $5.2 billion build in the first quarter from a $14.5 billion release a year earlier. Total net chargeoffs fell by 32% from a year earlier, to $6.3 billion.

Total loans increased by 4.9% from a year earlier, to $11.2 trillion, led by an 11% rise in consumer loans. Deposits rose by 6.3%, to $20 trillion.

The FDIC said that 44 institutions merged during the first quarter.

Former FDIC innovation chief lands new job

Sultan Meghji, who stepped down as chief innovation officer at the Federal Deposit Insurance Corp. earlier this year, has a new job. 

Meghji tweeted on Tuesday that he will join Reciprocal Ventures as a senior adviser. 

Reciprocal invests in early stage fintechs. Its portfolio includes Squads, an app that can be used to create decentralized autonomous organizations (DAOs), and Whym, a conversational commerce startup. 

The company is one of six investors behind the launch of a $205 million ecosystem fund for The Graph, an indexing layer for Web3 and blockchain data. 

Meghji, who resigned from the FDIC on Feb. 18, was the agency’s first chief innovation officer. He held the post for about a year. 

Shortly after leaving the agency, he wrote a op-ed for Bloomberg, saying 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 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. “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 was another area of concern.

“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.”

HomeTrust selects insider as next CEO

HomeTrust Bancshares in Asheville, N.C., is set to have a new CEO. 

The $3.5 billion-asset company said in a press release Tuesday that Hunter Westbrook will succeed Dana Stonestreet at CEO on Sept. 1. Westbrook will remain president and CEO of HomeTrust Bank. 

Stonestreet, who has been CEO since 2013, will remain chairman. He is set to retire as chairman at the company's 2023 annual meeting.

“Hunter’s commercial banking expertise, vision for strategic growth and proactive leadership have been integral in the transformation of HomeTrust into a leading regional commercial bank,” Stonestreet said in the release. 

Westbrook joined the company in June 2012 as chief banking officer. He has been in his current roles since September 2021. He was president and CEO of two community banks before joining HomeTrust.

Brookline in Mass. to buy PCSB in N.Y.

Brookline Bancorp in Boston has agreed to buy PCSB Financial in Yorktown Heights, N.Y. 

The $8.6 billion-asset Brookline said in a press release Tuesday that it will pay $313 million in cash and stock for the $2 billion-asset PCSB. The deal, which is expected to close in the second half of this year, priced PCSB at 117.6% of its tangible book value. 

PCSB Bank will retain its New York charter and operate as a separate bank unit of Brookline after the deal closes. PCSB has $1.3 billion of loans and $1.6 billion of deposits. 

“This transaction represents a unique opportunity for Brookline to expand its banking operations into one of the country’s largest deposit markets through the acquisition of a complimentary commercial banking organization,” Paul Perrault, Brookline’s chairman and CEO, said in the release. 

“PCSB has a high-quality loan portfolio, deposit base and talented employees, making it an excellent addition to our organization,” Perrault added. 

Brookline said it expects the deal to be 13% accretive to its earnings per share. It should take the company less than four years to earn back an expected 7.5% dilution to its tangible book value.

Brookline said it plans to cut about 30% of PCSB’s annual noninterest expenses, or about $10.8 million. The company expects to incur $21.4 million of merger-related charges. 

Michael Goldrick, PCSB’s chief lending officer, will become president and CEO of PCSB Bank. One PCSB director will join Brookline’s board. 

Brookline was advised by Performance Trust Capital Partners and Goodwin Procter. PCSB was advised by Piper Sandler and Luse Gorman.

Cambridge Bancorp to buy Northmark Bank

Cambridge Bancorp in Massachusetts has agreed to buy Northmark Bank in North Andover, Mass.

The $5 billion-asset Cambridge said in a press release Monday that it will pay $63 million in stock for the $442 million-asset Northmark. The deal, which is expected to close in the fourth quarter, priced Northmark at 118% of its tangible book value. 

The deal is expected to be 5.8% accretive to Cambridge’s 2023 earnings per share, excluding merger-related expenses. It should take about two years for Cambridge to earn back an estimated 1.7% dilution to its tangible book value. 

Cambridge expects to incur $10.7 million of merger-related expenses. The company plans to cut 35% of Northmark’s annual noninterest expenses. 

Northmark has three branches, $314 million of loans and $381 million of deposits. 

Jane Walsh, Northmark’s president and CEO, will join Cambridge’s board. 

“Since Northmark’s founding in 1987, the management team and board have created a franchise that provides exceptional service to its clients in locations where Cambridge currently does not have banking offices,” Denis Sheahan, Cambridge’s chairman, president and CEO, said in the release.

"Northmark’s dedication to providing individuals and businesses with customized attention and tailored financial solutions will greatly complement our broad range of products and services,” Sheahan added.

Cambridge bought the $1 billion-asset Wellesley Bancorp in 2020 and the $556 million-asset Optima Bank & Trust in 2019. 

"We believe financial metrics for this acquisition appear reasonable and expansion in strategically adjacent Merrimack Valley markets should add shareholder value assuming key relationship officers from Northmark ... transition to" Cambridge, Jake Civiello, an analyst at Janney Montgomery Scott, wrote in a note to clients.

"Revenue synergies such as larger commercial lending capacity and wealth management should materialize over time," Civiello added.

Piper Sandler and Hogan Lovells US advised Cambridge. Griffin Financial Group and Goodwin Procter advised Northmark.

Ohio Valley Bank parent names new CEO

Ohio Valley Banc Corp. in Gallipolis has a new CEO. 

The parent of the $1.2 billion-asset Ohio Valley Bank said in a press release Monday that Larry Miller II had also become CEO of its bank. Miller, who was the company’s chief operating officer, succeeded Thomas Wiseman, who remains chairman. 

Ryan Jones was named Ohio Valley’s chief operating officer. He will remain the company’s chief risk officer.

“We are committed to remaining an independent, community bank,” Wiseman said in the release. 

“To help achieve this goal, we are continually preparing for the future by adhering to our succession plan, which is approved annually by the board,” Wiseman added. “The promotions … are in accordance with the company’s previously approved plan.”

De novo bank opens in Georgia

Moultrie Bank & Trust, a recently approved de novo bank, has opened. 

The bank opened on May 9, the Federal Deposit Insurance Corp. noted on its website. Organizers were required in a Dec. 13 order from the FDIC to raise $20 million before opening. 

The group behind the de novo applied for deposit insurance last July. 

A consultant for the group said last summer that Donna Lott would serve as the bank’s CEO, while Collin Batchelor would be the chief financial officer. 

Lott was an executive vice president at Southwest Georgia Bank; Batchelor previously worked at Ameris Bank.

FirstBanc to buy Ala. branches from Southern States

FirstBanc of Alabama in Talladega has agreed to buy two branches from Southern States Bancshares in Anniston, Ala. 

The $850 million-asset FirstBanc said in a press release Monday that it will buy locations in the Alabama communities of Heflin and Ranburne. Most of the loans and deposits will also transfer to FirstBanc. 

The branches had $62.5 million of deposits in mid-2021, based on data from the Federal Deposit Insurance Corp. 

The deal is expected to close in the second half of this year. FirstBanc did not disclose the price it will pay.

“We have been interested in entering the market for a few years now and this allows our expansion to be an immediate impact to the communities we will serve,” Chad Jones, FirstBanc’s president and CEO, said in the release. 

“The branches tie in well with our existing franchise in east central Alabama,” Jones added. “We are committed to … providing our newest Cleburne County customers with exceptional local and personalized service.” 

The sale “allows us to better align our branch network with our strategic direction and ensures our customers will continue to receive the same exemplary service they are accustomed to,” Steve Whatley, Southern States’ chairman, said in the release.

Olsen Palmer advised FirstBanc. Performance Trust Capital Partners and Jones Walker advised Southern States.

Proposed N.H. mutual gets state approval

Organizers of the proposed Walden Mutual Bank have received conditional approval from the New Hampshire Banking Department. 

Walden Mutual, which is seeking to become the first new mutual in years, has already made a few loans. The bank would be based in Concord. 

The group behind the effort is looking to raise at least $25 million of initial capital, Charley Cummings, the proposed bank’s founder, told the Concord Monitor. He said the plan is to open in late summer.

Organizers applied with the Federal Deposit Insurance Corp. for deposit insurance in September.

Friendly Hills Bancorp forms truck lending group

Friendly Hills Bancorp in Whittier, Calif., has created a specialty lending group focused on financing commercial trucks and vehicles. 

The parent of the $292 million-asset Friendly Hills Bank said in a press release Monday that its truck lending group will provide capital for buying or refinancing on-road medium duty and heavy duty vehicles. 

The division will provide direct funding, including grants from the California Air Resources Board and support under the California Capital Access Program. The group is accepting credit applications for up to $250,000. 

Marc Merino joined the company as director of specialty lending. 

The new group “represents a significant step in Friendly Hills Bank’s strategic plans to better serve California’s underserved market and make a lasting impact on the community,” Nathan Rogge, the company’s president and CEO, said in the release.

"Our new line of business is just one of our many areas of expertise and we look forward to better serving the banking needs of small [and midsize] businesses throughout Southern California,” Rogge added.

Cape Cod Five Cents names new CEO

Cape Cod Five Cents Savings Bank in Hyannis, Mass., has new leadership. 

The $4.6 billion-asset bank said last week that Matt Burke had become its CEO, while Bert Talerman was named its president. They each succeeded Dorothy Savarese, who will remain executive chairman for one more year. 

“Cape Cod 5 is an organization whose purpose and mission I have believed in since joining the bank 10 years ago, and I look forward to leading the institution in its next chapter,” Burke said in a letter posted on the bank’s website. 

“As a community bank, Cape Cod 5 is dedicated to enriching the lives of those we serve,” Burke added. “Becoming the bank’s next CEO is a privilege that I take very seriously.” 

Burke joined the bank in October 2012. He was the chief financial officer from 2014 to 2019 and co-president from 2019 until becoming CEO, according to his LinkedIn profile. 

Talerman joined Cape Cod in 2007. He was named co-president, along with Burke, in 2019. 

“It has been a privilege to serve Cape Cod 5 and our customers, community members and employees for nearly 30 years, and I look forward to continuing to support the bank’s mission … for the coming year,” Savarese said in a statement posted on her LinkedIn account.

First Northern in California lines up next CEO

First Northern Community Bancorp in Dixon, Calif., is preparing for its next leader. 

The $1.9 billion-asset company said in a press release Friday that Louise Walker will retire as president and CEO on Dec. 31. 

Jeremiah Smith, First Northern’s chief operating officer, will succeed Walker on Jan. 1. 

Walker will remain the company’s board, while Smith will become a director when he is promoted. 

“After 12 years as CEO, navigating some of the most challenging times during my career, it seems about as right as it can be to make this transition,” Walker said in the release.

"Jeremiah has demonstrated over the years that his leadership abilities during crisis and steady state are exceptional,” Walker added. “Community banking is a people business, and he cares deeply about our employees.”

Ames National in Iowa selects next chairman

Ames National in Iowa has a new chairman. 

The parent of the $1.1 billion-asset First National Bank said in a press release that Thomas Pohlman had stepped down after five years as its chairman. He was succeeded by Patrick Hagan. 

Pohlman, who has been on the board for 15 years, will remain a director until he reaches the mandatory retirement age next April. 

Hagan, a retired executive at Fareway Stores, has been an Ames director since 2017. 

“We are thankful for the leadership that Tom has provided the company and its affiliate banks … over the past 22 years,” John Nelson, Ames National’s president and CEO, said in the release. “He has been a great mentor and sounding board for our management teams.”

Truist CFO Daryl Bible to retire

Truist Financial in Charlotte, N.C., is looking for its next chief financial officer. 

The $544 billion-asset company said in a press release Friday that Daryl Bible will retire as its CFO. He will remain at Truist until they hire his successor. 

“Daryl has played an instrumental role in the success of our merger of equals—one of the largest financial services mergers in recent history,” Bill Rogers, Truist’s chairman and CEO, said in the release. 

“His leadership, commitment and expertise have greatly contributed to our success and purpose, and we all thank Daryl for his many years of service to Truist teammates, clients and communities,” Rogers added.

Bible joined Truist predecessor BB&T in January 2008 from U.S. Bancorp. He became CFO nine months later. 

"I’ve had the privilege of working alongside the best finance team in the business and in helping build Truist as we know it today,” Bible said in a LinkedIn post. 

“I’m honored to have served as the [CFO] through many phases of our journey, from the Great Recession to a global pandemic, and most recently during one of the largest financial institution mergers of our time," Bible added.

Bible will provide consulting services to Truist for a year after he retires. He will be paid $125,000 a month, along with nearly $2.8 million when the consulting contract ends.

Bible is the third high-profile BB&T executive to announce plans to retire. 

Chairman and CEO Kelly King stepped down from those roles in recent months, while Chris Henson, BB&T's president and chief operating officer, has also retired.