Nano Banc in Calif. adds new CEO, chairman

Nano Banc in Irvine, Calif., made changes to several high-profile posts. 

The $1.1 billion-asset business bank said in a press release that it had named R. Scott Racusin as its CEO and Mary Lynn Lenz as its chairman. Steven Buster was named vice chairman.

Racusin previously served as president and CEO of Merchants Bank of California. He was also set to become president and CEO of Robinhood Bank when the startup was looking to obtain a charter.

Lenz was CEO of Foothills Bank, which was sold to Glacier Bancorp in Kalispell, Mont. Buster is a former president and CEO of Pacific Mercantile Bank. 

“I believe in Nano Banc’s potential to deliver a premier community banking experience for customers and shareholders alike,” Racusin said in the release. “The past is behind us, and the future looks bright as the new board and I aggressively focus on forging a new future.”

Nano Banc has been looking to bounce back from several regulatory orders. 

The Federal Reserve hit Nano with a cease-and-desist order in January tied to the bank’s inability to comply with previous enforcement actions. The Fed ordered the bank to change its compliance policies and procedures with a focus on oversight of loans to bank executives and gaps in its leadership team.

The California Department of Financial Protection issued the bank a order in early 2021 instructing it to bolster capital and reduce its concentration of commercial real estate loans. 

Nano ran afoul of the state’s order late last year, when it replaced several directors and appointed new leadership without notifying the state. That led to a C&D order on Dec. 15.

U.S. Bancorp to pay $37.5M fine over fake accounts

U.S. Bancorp in Minneapolis will pay a $37.5 million penalty to the Consumer Financial Protection Bureau to address claims it opened accounts without informing customers or getting their consent. 

The $591 billion-asset bank entered into a consent order with the CFPB on Thursday. 

The order addresses claims that U.S. Bancorp employees issued credit cards and lines of credit, along with deposit accounts, to meet sales goals and hit incentives targets. 

The CFPB said the actions ran afoul of the Truth in Lending Act, the Truth in Savings Act, the Consumer Financial Protection Act and the Fair Credit Reporting Act.

“The bank’s conduct likely caused substantial injury in the form of fees; negative effects on consumer-credit profiles; the loss of control over personal identifying information; and the expenditure of consumer time and effort,” the bureau said in a press release. 

U.S. Bancorp was ordered to stop any unlawful practices and to develop a plan to return all unlawfully charged fees and costs, plus interest.

Blue Ridge Bankshares has update on fintech, mortgages

Blue Ridge Bankshares in Charlottesville, Va., reported lower quarterly earnings that reflected adjustments to the value of its fintech investments and a sharp decline in mortgage volume. 

The $2.8 billion-asset company’s second-quarter net income fell by 94% from a quarter earlier, to $1.1 million.

Blue Ridge said the lower results reflected $9.4 million of fair value adjustments tied to equity investments in certain fintechs and a $3.6 million decline in income from its mortgage division. 

The company did gain some traction in fintech, with revenue tied to those relationships increasing by 38% from a quarter earlier, to $1.8 million. 

Deposits tied to fintechs more than doubled from the end of 2021, to $395 million. Loans associated with fintech rose by 6% in the first half of this year, to $25.6 million.   

The fintech relationships generated $55.9 million of assets under management. 

Blue Ridge said quarterly mortgage volumes declined by 22% from a quarter earlier, to $117.8 million, largely reflecting lower demand following interest rate hikes. 

The company noted that it has been cutting mortgage personnel since the fourth quarter. The cuts will translate into $2 million of lower annual noninterest expenses, beginning in the second half of this year.

Heritage Commerce in California selects next CEO

Heritage Commerce in San Jose, Calif., will soon have a new CEO. 

The $5.1 billion-asset company said in a press release Thursday that Clay Jones will also succeed Walter Kaczmarek as president, effective Sept. 15.

Jones, who is president and chief operating officer of Heritage Bank of Commerce, will also join the company’s board. Kaczmarek will remain on the board.

“I would like to thank Walt for his unwavering commitment to the success of both the company and the bank,” Jack Conner, Heritage Commerce’s chairman, said in the release. “We very much appreciate his willingness to return as [CEO] in March 2021, as we developed a transition plan that would lead the company into the future.” 

Jones joined the bank in 2019 as president of community business banking. He was promoted to his current posts last year. Prior to joining Heritage Commerce, he was president of Presidio Bank.

Kaczmarek originally served as CEO from 2005 until August 2019. He returned to that post in March 2021.

Red River Bancshares in La. to open New Orleans branch

Red River Bancshares in Alexandria, La., is planning to open its first branch in New Orleans.

The $3.1 billion-asset company said in a press release that it leased and remodeled a downtown branch. The location, which received regulatory approval, will open in the third quarter. 

Red River opened a branch in Lafayette, La., in January. 

“We continued to execute our organic expansion plans as we invest for future growth opportunities and to take advantage of market opportunities,” Blake Chatelain, Red River’s president and CEO, said in the release. 

Lafayette and New Orleans “are experiencing changes in the competitive banking landscape, and we are seeing an increasing number of new opportunities to expand our customer base and market share,” Chatelain added.

Tech upgrades in works at several community banks

Several community banks used their quarterly earnings releases to tease out technological enhancements.

Kearny Financial in Fairfield, N.J.; Quaint Oak Bancorp in Southampton, Pa.; and Third Coast Bancshares in Humble, Texas, were among the smaller banks to talk about upgrades in their core platforms, working with fintech or moving into Banking-as-a-Service (BaaS). 

The $7.7 billion-asset Kearny said in a press release that it is looking to adopt a cloud-based digital banking platform. The company also plans to expand its data analytics, artificial intelligence (AI) and digital marketing capabilities. 

Kearny has been working with Glia, Q2 Holdings, clinc and ZSuite Technologies. 

“We believe that our strategic focus on digital client engagement is the ideal complement to the exceptional service that our team provides within the communities where we maintain a physical presence,” Craig Montanaro, Kearny’s president and CEO, said in the release. 

“This omnichannel approach allows us to further strengthen our existing client relationships while expanding our products and services into new markets in an efficient and cost-effective manner,” Montanaro added. 

The $752 million-asset Quaint Oak said it is looking to introduce a BaaS platform to form more fintech partnerships. The company also noted that, because of rising interest rates and the chance of an economic slowdown, it could look to raise capital earlier than planned. 

Finally, the $3.4 billion-asset Third Coast Bancshares said it incurred expenses in the second quarter tied to fintech and BaaS initiatives. The company didn’t provide any other details. 

"By making these investments, we believe we will be in a much better position to grow deposit and fee income,” Bart Caraway, Third Coast’s chairman, president and CEO, said in a press release.

FDIC approves proposed de novo in S. Florida

Organizers of the proposed Evermore Bank in Fort Lauderdale, Fla., have received conditional approval from the Federal Deposit Insurance Corp. 

The FDIC is requiring the group to raise at least $25 million before opening the bank. 

Organizers originally outlined plans to raise $26 million to $45 million of initial capital. They plan to open a second branch in Wellington, Fla., during the first quarter of the bank's first year of operations. 

The goal is for Evermore to become profitable by the first quarter of its third year in business. Organizers also plan to reach $235 million of assets, $215 million of deposits and $172 million of loans by the end of the bank's third year.  

Steven Sanzone would serve as the proposed bank’s CEO. Sanzone was a market president at Grove Bank & Trust from November 2019 to December 2021, according to his LinkedIn profile.

The FDIC has given conditional approval to at least six de novos this year.

Customers in Pa. makes progress with digital assets push

Customers Bancorp in Wyomissing, Pa., continues to make progress with digital assets. 

The $20.3 billion-asset company said in a press release that it onboarded 90 instant token clients to its digital bank during the second quarter, increasing total customers to 190. 

Digital asset-related deposits increased by $300 million in the second quarter from a quarter earlier. The company said it had attracted about $2.1 billion of core low- to no-cost deposits through its instant token platform. 

"We continue to expect digital asset-related deposits to grow in 2022 as our pipelines remain strong, giving us an opportunity to further transform our deposits into a high quality, low- to no-cost, stable and growing deposit franchise,” Sam Sidhu, the president and CEO of Customers Bank, said in the release.

How a small Ohio bank pulled in 10 buyout offers

Peoples-Sidney Financial in Sidney, Ohio garnered considerable interest from potential buyers before agreeing to be sold to Farmers & Merchants Bancorp in Archbold, Ohio. 

The $2.7 billion-asset F&M agreed in mid-June to buy the $133 million-asset Peoples-Sidney for $27 million. 

Peoples-Sidney received 10 nonbinding indications of interest before agreeing to talk with F&M, according to a regulatory filing tied to the pending merger. 

Peoples-Sidney hired an investment bank in January to help it find a buyer. The investment bank contacted 30 potential suitors on March 14. Of those, 25 signed a nondisclosure agreement, and 10 submitted offers on April 7. 

Peoples-Sidney’s board instructed its investment bank to invite four of the potential candidates, including F&M, to conduct “a more-detailed and comprehensive due diligence process.” F&M conducted its on-site due diligence on April 19-20. 

Each suitor submitted revised indications of interest on May 12. 

F&M’s offer consisted of 60% stock and valued Peoples-Sidney at $20.49 a share. Two of the other proposals had a value of $23 a share, while the fourth pitch was $20.50 a share – each of those were all-cash offers. 

Peoples-Sidney asked its investment bank to inquire if each offer was the final and best proposal. One suitor was asked to remove a clause requiring Peoples-Sidney to have a minimum equity level at closing, and F&M was asked if it would let Peoples-Sidney’s investors elect cash or stock. 

The minimum equity level was removed, and F&M gave Peoples-Sidney three options for consideration. One of the other candidates said it would be open to increasing its offer by $300,000.

The Peoples-Sidney board favored the F&M pitch with at least 65% stock because, at $24 a share, it was the highest bid. Conversations also focused on having F&M include a collar structure to protect against a decline in the stock exchange ratio. 

Peoples-Sidney notified the other banks on May 18 that it “was not interested in continuing conversations,” the filing said. It entered into an exclusivity agreement with F&M. 

The parties agreed to a collar where the exchange ratio would be fixed if F&M’s stock price was between $35.95 and $40.35 a share on the last trading day before signing the merger agreement. It would float if the stock price fell below $35.95 a share. 

Peoples-Sidney received the initial draft of the merger agreement on May 24. The board unanimously approved the merger on June 14. 

The deal, which was announced the next day and is expected to close by the fourth quarter, priced Peoples-Sidney at 175% of its tangible book value. 

The acquisition “creates immediate value for our shareholders, customers, and communities and I am excited to expand F&M’s community-oriented banking,” Lars Eller, F&M’s president and CEO, said in a press release announcing the deal.  

“This transaction is an excellent opportunity for Peoples to become part of a larger community banking organization that offers customers a wider range of financial services,” Eller added. 

F&M expects the deal to be 2.5% accretive to its 2023 earnings per share, excluding merger-related costs. It should take a little over a year for the company to earn back an estimated 2.1% dilution to its tangible book value.  

F&M expects to cut 26.7% of Peoples-Sidney's annual noninterest expenses and incur $3 million of merger-related charges.

Heritage Southeast to sell to First Bancshares in Miss.

Heritage Southeast Bancorp. in Jonesboro, Ga., which tried unsuccessfully to sell its bank to a credit union, has agreed to be sold to First Bancshares in Hattiesburg, Miss. 

The $6.3 billion-asset First Bancshares said in a press release Wednesday that it will pay $207 million in stock for the $1.7 billion-asset Heritage Southeast. The deal, which is expected to close in the fourth quarter or early next year, priced Heritage Southeast at 181% of its tangible book value. 

Heritage Southeast has 23 branches, $1.1 billion of loans and $1.5 billion of deposits. 

The acquisition “and the upcoming closing of our merger with Beach Bank represent continued execution on our strategic plan of creating a high-performing community bank in the Southeast,” Hoppy Cole, First Bancshares’ president and CEO, said in the release. 

“Each transaction is extremely attractive and enhances our organizations’ franchise value,” Cole added. “Collectively, they are transformative for our company providing meaningful market share in some of the most dynamic, fastest growing markets in the South.” 

First Bancshares said the deal should generate double-digit earnings accretion once cost savings kick in. It should take less than three years for First Bancshares to earn back the less than 8% dilution to its tangible book value.

First Bancshares plans to cut about 30% of Heritage Southeast's annual noninterest expenses, or $48.5 million. The company expects to incur $26 million of merger-related expenses.

Leonard Moreland, Heritage Southeast's CEO, will become First Bancshares' Georgia president.

Heritage Southeast agreed in March 2021 to sell its bank to VyStar Credit Union in Jacksonville, Fla., for $195.7 million in cash. The parties agreed to terminate the deal earlier this year after they were unable to secure regulatory approval. 

Keefe, Bruyette & Woods; D.A. Davidson; and Alston & Bird. Piper Sandler and Nelson Mullins Riley & Scarborough advised Heritage Southeast.

Sturgis Bancorp in Mich. names new bank leadership

Sturgis Bancorp in Michigan has a new bank CEO. 

The $318 million-asset company said in a press release Wednesday that Jason Hyska had been appointed to the role. Hyska previously served as head of retail lending. 

Matt Scheske was named the bank’s president and chief operating officer. He was head of commercial lending. 

Hyska and Scheske succeeded Eric Eishen, who remains the company’s president and CEO. Eishen will oversee strategic planning, risk management, regulatory affairs, compliance and legal. He also is responsible for Oakleaf Financial Services, the bank's investment planning unit. 

"Several years ago, we began to consider the future of Sturgis Bank … and who would assume the daily management of the bank,” David Franks, the bank’s chairman, said in the release. 

“Eric's role was transitioning to corporate governance, risk management and strategic initiatives,” Franks added. “We are pleased that he will stay with the company to provide mentorship for Jason and Matt in addition to the other duties he is currently performing."

Hyska and Scheske also joined the bank’s board.

Grasshopper in NY signs up initial BaaS client

Grasshopper Bank in New York has signed its first Banking-as-a-Service client. 

The $305 million-asset bank is working with Treasure Financial, a fintech that provides automated cash management solutions for growing businesses. The partnership is designed to support Treasure’s treasury management offering and help Grasshopper deepen ties to small and midsize businesses. 

Treasure said in a press release that the companies are exploring ways to offer its solution to Grasshopper clients. 

“Treasure is the leader in treasury management as a service that keeps building, offering and strengthening their product, and we’re excited to partner with them,” Mike Butler, Grasshopper’s CEO, said in the release. 

“We believe in their business model and look forward to helping them achieve their growth goals,” Butler added. “We also have a strong alignment in terms of the markets we serve, so being able to offer this type of platform to our clients in the future will be another great win.” 

Treasure is planning on announcing more products in the second half of 2022.

BayFirst adds new SBA product, hires mortgage team

BayFirst Financial in St. Petersburg, Fla., is seeing early traction from the launch of a Small Business Administration product. 

The $922-million asset company said in a press release that it debuted Bolt, a 7(a) product designed to quickly originate loans of $150,000 or less, during the second quarter.

BayFirst said that, through July 22, about 350 loans have been made or are in process, totaling $46.5 million. 

The company plans to deploy new automation to the program through its proprietary loan origination system and incorporate open API integration with marketplace lending partners. The goal is to increase volume and speed of delivery while limiting the need for more staffing. 

BayFirst also said it hired a big mortgage team located in Las Vegas, Nev., in early July.

The moves are the latest in a series of changes in BayFirst's SBA and mortgage operations. 

BayFirst closed three mortgage offices and laid off 62 mortgage employees earlier this year. The company launched its a national SBA platform during the first quarter after hiring six lenders.

Finward closes two branches, reinvesting in digital

Finward Bancorp in Munster, Ind., has closed two branches. 

The $2.1 billion-asset company said in a press release Wednesday that it shuttered the offices on July 1.

Finward did not identify the markets where the branches were located, the restructuring costs or long-term cost savings. 

Finward, which had already closed a branch in 2021, said it is evaluating its remaining 29 branches for future closures, noting that some have “the potential for reducing operating overhead.” 

The company plans to redeploy some of the expense savings into digital channels.

Investar to sell two branches in south Texas

Investar Bancorp in Baton Rouge, La., has agreed to sell two branches in south Texas to First Community Bank in Corpus Christi, Texas. 

The $2.6 billion-asset Investar said in a press release that it expects to sell the locations in the first quarter. 

“We expect that the sale will permit us to focus more on our core markets,” the release said. 

The branches – in Alice and Victoria – had $34 million of deposits in mid-2021, according to the most-recent data from the Federal Deposit Insurance Corp. 

Investar closed two branches and sold two former locations and a tract of land during the second quarter.

BaaS drives deposit growth at New York Community

New York Community Bancorp in Hicksville said deposit growth in the second quarter largely reflected growth in its Banking-as-a-Service (BaaS) platform.

The $63.1 billion-asset company said in a press release that its total deposits increased by $3.3 billion from a quarter earlier, to $41.2 billion. Nearly 70% of that increase – $2.3 billion – came from its BaaS operations. 

New York Community had $7.8 billion of BaaS deposits, or roughly 20% of all deposits, on June 30. 

The company said that $5.5 billion of its BaaS deposits are tied to fintech, $1.6 billion is linked to mortgage companies and $652 million is linked to municipalities and the Treasury Department’s prepaid debit card program. 

New York Community also comment on its still-pending acquisition of Flagstar Bancorp, with Thomas Cangemi, the company’s chairman, president and CEO, saying “we feel very good” about the deal. 

“Over the past 15 months, both sides have diligently worked together to get us into a strong position to close the deal quickly once all regulatory approvals are received in order to hit the ground running," Cangemi said.

Hanover Bancorp to expand onto Long Island

Hanover Bancorp in Mineola, N.Y., plans to open its first branch on Long Island. 

The $1.5 billion-asset company said in a press release Wednesday that it will open a location in Hauppage, N.Y., by the end of this year. 

Hanover said the full-service, high-tech branch has already received regulatory approval. It will be located next to the Long Island Innovation Park. 

“Moving eastward to Suffolk County Long Island strategically supports the growth of Hanover’s commercial, municipal and retail banking verticals,” the release said. 

The company opened a branch in Freehold, N.J., earlier this year that focuses on loans to small and midsize businesses, including Small Business Administration financing.

Ford's FDIC application sheds light on ILC plans

Ford Motor Company said obtaining an industrial loan charter would help it make electric vehicles (EVs) accessible to all Americans.

The automaker said in its application with the Federal Deposit Insurance Corp. that the proposed Ford Credit Bank would offer auto loans for EVs through indirect retail installment and lease contracts originated by auto dealers. The bank would also be able to offer direct financing to consumers. 

The bank, which would be a unit of Ford Motor Credit Co. and be based in Salt Lake City, would initially offer financing for conventional vehicles. Ford Credit Bank would also offer deposit accounts, loans to dealerships and loans to help consumers and businesses finance automotive-related parts and accessories. 

Deposit products would include accounts to support the purchase of EVs and other green initiatives, along with CDs. 

“Our unique Community Reinvestment Act (CRA) value proposition … will allow us to collaborate with nonprofit partners and leverage Ford’s expertise to enable greater impact in historically marginalized communities with limited or no access to affordable or reliable transportation,” the filing said. 

“These solutions … may include, but are not limited to, nonprofit fleet capacity building, fleet electrification, public-private-philanthropic mobility partnerships and mobility service solutions focused on enabling greater community access and social impact,” the filing added. 

Ford said Frank Stepan would serve as the bank’s president and CEO. Stepan previously served as vice chairman of UBS Bank USA and was a senior risk and lending executive at Morgan Stanley Bank. 

The board would include Erica Bovenzi, former deputy general counsel for the FDIC; Lisa Violet, chief auditor of Varo Bank; Claire Tucker, former president and CEO of CapStar Bank; and former Rep. Mia Love.

Trustmark in Miss. pursuing business lines, tech upgrades

Trustmark in Jackson, Miss., plans to launch new business lines, enter new markets and improve technology under a new program. 

The $17.4 billion-asset company said in a press release Tuesday that FIT2GROW began in the second quarter. As part of the initiative, Trustmark opened a loan-production office in Atlanta that will focus on its institutional business. 

Trustmark plans to form an equipment finance business line as part of its specialty banking unit in Atlanta. The new business line will focus on national and middle-to-large-ticket business.

The company also invested in technology upgrades for its insurance, wealth management and mortgage banking business, along with human resources and accounting. Trustmark also made “significant upgrades” to its mobile banking platform, ITM network and digital marketing programs. 

More changes are expected in the third quarter. 

The effort comes a few months after Trustmark announced plans to eliminate nonsufficient funds (NSF) fees, which will cut annual revenue by about $2 million.

NSTS Bancorp in Illinois names new bank CEO

NSTS Bancorp in Waukegan, Ill., has a new bank CEO. 

The $285 million-asset company said in a press release Tuesday that Nathan Walker had also become its executive vice president. Walker succeeded Stephen Lear as CEO of North Shore Trust and Savings. 

Lear remains chairman of the bank and the company’s chairman, president and CEO. 

Walker, who joined the company in 1996, has been the bank’s president and chief operating officer since November 2020. 

“It has been a tremendous honor to serve as the CEO of the Bank for the past 24 years,” Lear said in the release. “The board and I are confident that Nathan is the right person to continue the traditions and move the bank forward.”

Mark Hoppe to retire as Fifth Third regional president

Mark Hoppe, who orchestrated the sale of Taylor Capital Group to MB Financial nearly a decade ago, is retiring. 

Hoppe plans to step down as the Chicago region president for the $211 billion-asset Fifth Third Bancorp, a title he gained after the Cincinnati regional bank acquired MB Financial in 2019. He will retire at the end of this year. 

Mark Heckler, a senior commercial banker, will succeed Hoppe, who will serve in a senior advisory role after his retirement. 

Hoppe “has made a substantial and lasting impact on customers, employees and communities,” Tim Spence, Fifth Third’s president and CEO, said in the release. “He has established a unique legacy in the Chicago market.”

Genesis Bank in Calif. launches escrow division

Genesis Bank in Newport Beach, Calif., has created an escrow division. 

The $95.1 million-asset bank said in a press release Tuesday that Genesis Bank Escrow handles commercial and commercial real estate-related escrow transactions, including compliance with local, state and federal real estate guidelines. 

Genesis launched the division after hiring Michelle Gregorian. 

“Over multiple decades, our team has successfully built, acquired and operated numerous leading commercial escrow companies across the bank’s target markets,” Stephen Gordon, the bank’s chairman and CEO, said in the release. 

“Our extensive collective experience in the escrow business, through many cycles, has enabled us to successfully launch our escrow division with a highly skilled team of professionals and leading-edge technology,” Gordon added. 

Genesis Bank opened in August 2021.

Ford applies for industrial loan charter

Ford Motor Co. has applied to form a bank. 

Ford Credit Bank would operate under an industrial loan charter from Utah. Ford applied with the Federal Deposit Insurance Corp. on July 22 for deposit insurance. 

Toyota and BMW already have industrial banks. 

Ford Credit Bank would look to help customers finance vehicles, accept deposit and provide funding to the automaker, among other things.

Bank First to buy Hometown Bancorp in Wisconsin

Bank First in Manitowoc, Wis., has agreed to buy Hometown Bancorp in Fond Du Lac, Wis. 

The $2.9 billion-asset Bank First said in a press release Tuesday that it will pay $124 million in cash and stock for the $628 million-asset Hometown. The deal, which is expected to close in the fourth quarter, valued Hometown at 213% of its tangible book value. 

Hometown has $421 million of loans and $539 million of deposits. 

Bank First said Hometown’s shareholders and customers will benefit from its minority stake in UFS, a bank technology outfitter that provides digital, core, cybersecurity, managed IT and cloud services to Midwestern banks. 

Tim McFarlane, Hometown’s president and CEO, will become Bank First’s president and will join its board. 

The deal is expected to be 13% accretive to Bank First’s earnings per share in the first full year of operations, including cost savings. It should take a little over two years for Bank First to earn back any dilution to its tangible book value. 

Bank First plans to cut about 40% of Hometown’s annual noninterest expense. The company expects to incur $8.7 million of merger-related expenses. 

Piper Sandler and Alston & Bird advised Bank First. Reinhart Boerner Van Deuren advised Hometown.

Somerset Savings to convert, buy Regal Bancorp

Somerset Savings Bank in Bound Brook, N.J., plans to convert to a stock-owned company and acquire Regal Bancorp in Livingston, N.J. 

The $649 million-asset Somerset said in a press release Monday that it has formed SR Bancorp to prepare from its conversion from a mutual bank. Somerset also plans to convert to a New Jersey chartered commercial bank. 

The mutual said it agreed to pay $58.4 million in cash and stock for Regal, the parent of the $545 million-asset Regal Bank. The conversion and the acquisition are expected to close in the second quarter. 

"The simultaneous conversion and merger … and our conversion to a commercial bank charter, marks a pivotal point in the history of Somerset Savings,” William Taylor, the mutual’s chairman and CEO, said in the release.

The transaction “provides our depositors the ability to benefit as shareholders in the combined organization and allows our customers to benefit from the commercial lending expertise the Regal team brings to the combined company,” Taylor added. “The additional capital we raise in the offering will help support future growth.” 

David Orbach, Regal’s executive chairman, and two other Regal directors will join SR Bancorp’s board. Orbach will serve as SR Bancorp’s executive chairman. 

Somerset Savings was advised by Keefe, Bruyette & Woods and Luse Gorman. Regal was advised by The Kafafian Group and Windels Marx Lane & Mittendorf.

NBT Bancorp to buy insurance agency in northwestern NY

NBT Bancorp in Norwich, N.Y., has agreed to buy an insurance agency. 

The $11.7 billion-asset company said in a press release that NBT Insurance Agency agreed to buy Harrison A. Rogers Agency. The price wasn’t disclosed. 

The deal is expected to close in the third quarter. 

H.A. Rogers is a small personal and commercial lines property and casualty insurance agency. 

NBT said the deal was a strategic purchase that will allow it to offer more insurance products in northern New York where its bank already operates. 

Separately, NBT said it will be subject to a cap on interchange fees starting in the third quarter, which reflects the bank crossing over $10 billion of assets. The cap will reduce NBT’s quarterly interchange income by about $3.7 million.

A look at which banks have received ECIP funds

Several banking companies have disclosed the receipt of capital from the Treasury Department's Emergency Capital Investment Program (ECIP).

The Treasury invested nearly $1.8 billion between late April and late July, according to data compiled by Performance Trust Capital Partners. The banks are issuing preferred stock in exchange for the fresh capital.

Security Federal in Aiken, S.C.; BancPlus in Ridgeland, Miss.; Broadway Financial in Los Angeles; and Ponce Financial Group in Bronx, N.Y., are among the companies that issued releases about their ECIP funding.

This chart includes more banking companies that have benefited from the program.

Source: Performance Trust Capital Partners

The Treasury set aside $8.7 billion to invest in Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) through the ECIP.

The capital will help those institutions provide loans, grants and forbearance for small and minority-owned businesses, as well as consumers in low-income and underserved communities.

Alpine Banks of Colo. raises $34M in private placement

Alpine Banks of Colorado in Glenwood Springs has raised $34 million through a private placement of common stock.

The $6.2 billion-asset company said in a press release that it sold nearly 1.2 million shares of Class B nonvoting stock at $28.50 each. Alpine Banks plans to use the proceeds for purposes that could include organic growth and enhancing regulatory ratios. 

“We feel the support for this offering, particularly in the current market environment, reflects Alpine’s strong performance and potential, which are driven by our dedicated employees, customers and communities,” Glen Jammaron, Alpine Banks of Colorado’s president and vice chairman, said in the release. 

D.A. Davidson was the financial adviser and sole placement agent. Lewis Roca Rothgerber Christie provided the company with legal counsel, while Holland & Knight advised the placement agent. 

National Bank in Denver invests in B2B payments firm

Finexio, an Orlando, Fla., B2B payments company, has raised $14 million from a group of investors that includes National Bank Holdings, Discover Financial Services and Mendon Venture Partners. 

Finexio said in a press release that the goal is to raise $30 million in this funding round. The other investors include Post Road Partners, The Banc Funds and EOM Investments. 

The funds will help Finexio promote its Payments-as-a-Service platform. 

"CFOs at medium and large-sized corporations are looking to do more with less, eliminate manual processes to save time, and increase visibility and control of their cashflow,” Finexio CEO Ernest Rolfson said in the release. 

“These executives rely on critical infrastructure AP2P software to run their business and make critical decisions,” Rolfson added. “Embedding Finexio's B2B payments capabilities directly into the software and workflows … makes digital payment adoption the simplest it has ever been.” 

Tim Laney, National Bank’s chairman, president and CEO, and Andrew Marquardt, a managing partner at Mendon Venture Partners, will join Finexio’s board. 

"We are pleased to invest as well as partner with Finexio to bring a powerful payments solution to our business clients in the vast middle market," Laney said in the release. 

"The ease of use together with the opportunity to reduce cost and drive efficiencies are truly impactful to business owners and operators,” Laney added.

Citizens becomes official bank of NFL's Giants

Citizens Financial Group in Providence, R.I., has become the official bank of the New York Giants. 

The $227 billion-asset company said in a press release Monday that it had also become the official bank of the New Jersey Devils and the Prudential Center in Newark, N.J. The company did not disclose the deal’s financial details 

“As we grow in New York City and New Jersey, we are proud to support these teams, and their fans, and appreciate the opportunity to engage with current and prospective customers,” Beth Johnson, Citizens’ chief experience officer, said in the release. 

Citizens’ signage will be visible at Giants training camp this summer. The Prudential Center tower on the corner of Mulberry Street and Edison Place in Newark will be rebranded as the Citizens Tower.

Citizens entered the New York market when it bought HSBC East Coast’sbranches in February. It also bought Investors Bank in New Jersey in April. 

Citizens will also partner with the Giants this summer to create a community program to address local needs, building on previously announced efforts in Chinatown and Queens. The company will announce a similar initiative with the Devils this fall.

MainStreet in Va. plans to debut BaaS product in 4Q

MainStreet Bankshares in Fairfax, Va., plans to fully introduce its Banking-as-a-Service product during the fourth quarter. 

The $1.8 billion-asset company said in a press release Monday that Avenu, its BaaS platform, is onboarding its initial beta testing client. 

Ten fintechs are queued up in various stages of progress, including four that intend to proceed when the beta process is complete. 

“Fintechs have a strong need for knowledgeable, credible partners who can help them manage risk and compliance obligations,” Todd Youngren, Avenu’s president, said in the release. 

“Preparing them to become fully compliant is a critical, intensive element of this process, and we are focusing our energy on getting that right," Youngren added. "Following the beta stage, we anticipate that onboarding will be streamlined into a 60-day process.” 

Avenu also serves 18 money service businesses and seven payment processors. 

The business brought in $70 million of noninterest-bearing deposits and had $488,000 of noninterest income in the first half of 2022. The business had $719,000 of noninterest expenses over the first six months of this year.

HomeTrust in NC to enter Atlanta with Quantum deal

HomeTrust Bancshares in Asheville, N.C., will enter Atlanta with an agreement to buy Quantum Capital in Suwanee, Ga. 

The $3.5 billion-asset HomeTrust said in a press release Monday that it will pay $67.6 million in cash and stock for the parent of the $660 million-asset Quantum National Bank. The deal, which is expected to close in the first quarter, priced Quantum at 153% of its tangible book value. 

Quantum has three branches and focuses on small business lending. 

“We are excited to be partnering with one of the highest-performing banks in Georgia and throughout the Southeast,” C. Hunter Westbrook, HomeTrust’s president and chief operating officer, said in the release. 

“Quantum’s strong team of experienced business bankers specializing in the origination of SBA loans aligns perfectly with our strategic initiatives to expand our fee-based businesses and grow our commercial deposit base,” Westbrook added. “Atlanta is one of the most dynamic markets in the country, which is perfectly suited for our branch-lite expansion strategy.” 

Narasimhulu Neelagaru, Quantum’s chairman, will join HomeTrust’s board. Bryan Cohen, CEO of Quantum National Bank, will serve as HomeTrust’s Georgia market president. 

HomeTrust said it expects the merger to be more than 20% accretive to earnings per share once cost savings are fully achieved in early 2024. It should take a little more than two years for HomeTrust to earn back as estimated 7.5% dilution to its tangible book value. 

HomeTrust plans to cut 24% of Quantum’s annual noninterest expenses. The company expects to incur $6.1 million of merger-related expenses. 

Raymond James and Silver Freedman, Taff & Tiernan advised HomeTrust. Piper Sandler and Hunton Andrews Kurth advised Quantum.

Trustar in Va. raises capital with expansion in mind

Trustar Bank in Great Falls, Va., has raised more capital to fuel expansion in northern Virginia. 

The $546 million-asset bank said in a press release that it brought in $18 million. The bank, which planned to raise $15 million, received more than $20 million in subscriptions. 

Trustar’s original capital raise in 2019 was also oversubscribed. 

“We are excited to have the continued investor support affording us the opportunity to build an outstanding financial institution serving the needs of our community,” Shaza Andersen, the bank’s CEO, said in the release. 

“This new capital will further position the Bank to effectively implement our growth strategy and build stockholder value,” Shaza Andersen, the bank’s CEO, said in the release,” Andersen added.

Customers to close five branches in Pennsylvania

Customers Bancorp in Malvern, Pa., plans to close five branches in Pennsylvania. 

The $19.2 billion-asset company said in a press release Friday that will shutter locations in Reading, Langhorne, Newtown Square and Wayne. Accounts will be transferred to other branches.

The closings are expected to take place in late October and early November. 

Customers has been focusing on opening commercial lending offices in other markets, along with investments in blockchain-related products. 

“The truth of the matter is more and more clients have moved to mobile and online banking making physical branches less necessary and more expensive,” Sam Sidhu, Customers’ president and CEO, said in the release.

"This consolidation provides wider services to a greater number of clients both on a local and on a national basis,” Sidhu added. 

Customers’ employees displaced by the closings will have the ability to post for open positions during this transition. 

How F.N.B. landed a deal for NC bank

Better late than never. 

That mantra rings true for F.N.B. Corp. in Pittsburgh, which agreed in May to buy UB Bancorp in Greenville, N.C., for $117 million in stock. 

The $42 billion-asset F.N.B. wasn’t among the first group of banks that the $1.2 million-asset UB Bancorp contacted to gauge interest in a potential deal, according to a regulatory filing tied to the pending acquisition. 

UB Bancorp’s board formed a special committee, then hired an investment bank in late January, to vet buyers. The investment bank contacted 12 potential acquirers; nine expressed an interest and seven signed a nondisclosure agreement to conduct due diligence. 

F.N.B. wasn’t contacted at that time. 

One of the potential suitors submitted an offer by UB Bancorp’s Feb. 16 deadline, proposing a deal that valued the company at $22 a share. At UB Bancorp’s request, the bank increased its offer on Feb. 22 to $22.12 a share. 

Another potential merger partner sent an offer to UB Bancorp on Feb. 25 that had a value of $23.50 a share. 

Each bank was asked to resubmit offers by March 24. Around the same time, UB Bancorp contacted another party to seek an all-cash offer; that bank “indicated that it was not interested in pursuing an acquisition.” 

One of the interested parties sent an offer of $20.88 a share, while the other proposed a deal valued at $22.23 a share – the declines reflected changes in each suitor’s stock price. 

While those banks continued to conduct due diligence, UB Bancorp’s investment bank contacted F.N.B. and another potential acquirer. F.N.B. expressed interest, while the other bank declined to discuss a deal. 

F.N.B. entered into a nondisclosure agreement on March 29. 

UB Bancorp, through its investment bank, asked F.N.B. and the other two suitors to submit their final proposals by May 4. One bank withdrew from consideration. 

F.N.B. proposed an exchange ratio that valued UB Bancorp at $18.43 a share. The other bank’s offer valued UB Bancorp at $18.22 a share, which included a lower exchange ratio from its prior pitch. 

UB Bancorp was able to persuade F.N.B. to slight increase its exchange ratio. The other bank ultimately withdrew its indication of interest. 

F.N.B. and UB Bancorp entered into an exclusivity period on May 17 that was set to last until June 6. A draft of a merger agreement F.N.B. used in another acquisition was sent to UB Bancorp the same day. 

Topics discussed between May 17 and May 27 included termination rights and specific severance and “pay-to-stay” bonuses for UB Bancorp’s non-executive employees. 

UB Bancorp’s board approved the merger and the agreement was signed on May 31. The deal, announced the next day, valued UB Bancorp at 154% of its tangible book value.  

The deal “represents another step in our continued investment in North Carolina,” Vincent Delie Jr., F.N.B.’s chairman, president and CEO, said in a press release announcing the acquisition. 

F.N.B. expects the merger to be about 2% accretive to its earnings per share, including cost savings. The company expects less than 1% dilution to its tangible book value.  

F.N.B. plans to cut about 45% of UB Bancorp’s annual noninterest expenses. It expects to incur $17 million of merger-related expenses.

The latest filing also disclosed the Robert Jones, UB Bancorp's president and CEO, will receive a lump sum payment of nearly $1.4 million if the deal is completed this year.

Home in Ark. saw 'mini mutiny' of Happy State employees

Home BancShares in Conway, Ark., suffered from a “mini mutiny” of employees in some of the markets it entered through the April acquisition of Happy State Bancshares in Amarillo, Texas. 

That assessment came from Johnny Allison, Home’s chairman, during the $24.3 billion-asset company’s second-quarter earnings call. 

“We did not see a very warm welcome,” Allison said during the call. “In hindsight, the moves appeared to be in the works for some time. Most employees left and went to some small Texas bank that I had never heard of.” 

Allison did not disclose how many people left, though he said the departures were “unprofessional … without any notice.” Instead, he spun the defections as a “blessing in disguise” for his bank. 

“Even with the temporary hardship that it created, it also created many opportunities for those that stayed and the many new hires who stepped up and took over with lots of enthusiasm and excitement,” he said. 

Allison vowed to compete aggressively against the bankers who left. 

“This will cost a little more money over the next couple of years as we use the strength of Home’s powerful balance sheet to compete very competitively in that market,” Allison said.

“This should be a lot of fun for everybody who stayed,” he said with a pronounced laugh. “I look at this as an unfortunate situation that is in the rearview mirror except for the competition for loans.”

Patriot National, American Challenger call off merger

American Challenger Development is again looking to sell itself after a plan to merge with Patriot National Bancorp in Stamford, Conn., was called off. 

The $976 million-asset Patriot National agreed in November to buy American Challenger for $119 million in a deal structured as a reverse subsidiary merger. Patriot had also entered into agreements to sell securities to certain investors to raise at least $875 million of capital. 

The termination was approved “after careful consideration and in light of the parties’ expected inability to satisfy certain of the closing conditions to the merger and recapitalization.” 

No termination fees will be paid.

American Challenger, which has a digital bank technology and operations platform under the Cache brand, said in a press release Thursday that it has hired Citi as its effort to find another buyer. 

American Challenger received conditional approval from the Office of the Comptroller of the Currency in December 2020 to form a de novo national bank. Patriot Bank received conditional OCC approval on June 30 to implement American Challenger’s business plan.

Vermont de novo receives conditional FDIC approval

Organizers of the proposed Bank of Burlington in South Burlington, Vt., have received conditional approval from the Federal Deposit Insurance Corp. 

The FDIC is requiring the group to raise $33 million before opening the bank. 

The group said in its December 2021 application for deposit insurance that it planned to raise $24 million to $30 million of initial capital. 

The bank will largely focus on small businesses with no plans to offer retail loans. Most of the deposits would come from small business owners, professionals and municipalities. 

“The bank intends to become the leading small business lender in its primary market area by assembling a talented team of bankers with deep roots in the local community and focusing resources on investments in human capital and technology infrastructure,” organizers said in their application.  

Geoffrey Hesslink would serve as the bank’s chairman and CEO. He was president and CEO of Merchants Bancshares in South Burlington, Vt., which was sold to Community Bank System in May 2017. He left Community Bank System the next year.  

Several organizers have ties to Champlain Investment Partners, including CEO Judith O’Connell.

Amerant boosted stake in mortgage company in 2Q

Amerant Bancorp in Coral Gables, Fla., increased its ownership stake in its mortgage company. 

The $8.2 billion-asset company said in a press release that its stake in Amerant Mortgage increased from 57.4% to 80% after two former principals became full-time bank employees and relinquished their interest in the business. Amerant also contributed $1 million in capital to the unit. 

Amerant Mortgage, which reduced headcount by 15%, to 67 employees, reached breakeven status during the second quarter. The business contributed $2.4 million of noninterest income during the second quarter after funding 253 loans totaling $118.6 million. 

Separately, Amerant said it began originating loans as part of a white label equipment finance effort. The company also plans to close a branch by the end of this year in a move that will led to $1.6 million in one-time charges and should generate an estimated $1.1 million in annual expense savings.

Live Oak adds mortgage company CEO to its board

Live Oak Bancshares in Wilmington, N.C., has appointed the CEO of a North Carolina mortgage company to its board. 

The $8.6 billion-asset company said in a press release Wednesday that Casey Crawford, a co-founder of Movement Mortgage in Charlotte, had become a director. 

"We are very pleased to welcome Casey to our board of directors,” Chip Mahan, Live Oak’s chairman and CEO, said in the release. “His depth of executive experience, including lending expertise, will be an excellent addition to our board as Live Oak Bank continues on its mission to be America’s small business bank.” 

Crawford, who is also chairman of Movement Bank, played tight end for the Carolina Panthers and Tampa Bay Buccaneers.

Citizens State parent to buy First Savanna in Illinois

First Lena Corp. in Lena, Ill., has agreed to buy First Savanna Savings Bank in Savanna, Ill. 

First Lena, the parent of the $325 million-asset Citizens State Bank, said in a press release that it expects to buy the $9.8 million-asset First Savanna in the fourth quarter. The price wasn’t disclosed.

Citizens will enter the Savanna market in northwestern Illinois when the deal closes. 

“Our team is dedicated to delivering an exceptional community banking experience and serving the needs of local agricultural, business and consumer customers,” Amy Baker, Citizens State’s president and CEO, said in the release. 

“We believe that a strong community is the foundation for growth, and we look forward to serving alongside the Savanna community, bringing with us banking knowledge and traditions, that have been a part of Citizens State Bank for over 140 years,” Baker added. 

Olsen Palmer and Godfrey & Kahn advised First Savanna. Gerrish Smith Tuck Consultants and Gerrish Smith Tuck advised First Lena.

Signature in NY to tap brakes on CRE lending

Signature Bank in New York plans to dial down its lending in coming months. 

The $116 billion-asset bank expects quarterly loan growth of $1 billion to $3 billion over the rest of this year. It previously projected increasing the size of its loan portfolio by $4 billion to $7 billion. 

Commercial real estate and fund banking are the areas where Signature plans to tap the brakes, CEO Joe DePaolo said during a Tuesday conference call to discuss second-quarter results. 

The move comes at a time when deposits shrank by about 5% in the second quarter from a quarter earlier, to $104 billion. The bank’s loan-to-deposit ratio was 69.2% on June 30.

Signature lost about $2.4 billion in digital currency assets during the second quarter as crypto customers withdrew funds. 

“Unprecedented” interest rate hikes by the Federal Reserve “could make it tough on the deposits side,” DePaolo added. “We’re just being cautious.”

BMO to buy environmental strategies firm

Bank of Montreal has agreed to buy Radicle Group, an environmental strategies company in Calgary.

The Canadian bank said in a press release Wednesday that it expects to close the deal by the end of this year. The price was not disclosed. 

Radicle develops carbon offsets and helps organizations measure and reduce emissions. 

The acquisition “supports BMO's climate ambition to be our clients' lead partner in the transition to a net-zero world, and the progress we're making for a thriving economy, a sustainable future, and an inclusive society," Dan Barclay, CEO of BMO Capital Markets, said in the release. 

"Radicle's leading expertise and innovative solutions make BMO a leader in carbon credit development capabilities and the environmental commodity market,” Barclay added. “These capabilities enhance our commitment to help our clients understand and manage the risks and opportunities of energy transition."

Radicle’s management team, including CEO Saj Shapiro, and employees will become part of BMO Capital Markets' global markets group.  

BMO Capital Markets and Torys advised BMO. Citi and Borden Ladner Gervais advised Radicle.