Horicon Bank in Wisconsin selects next president

Horicon Bank in Horicon, Wis., has a new president with a familiar name. 

The $1.2 billion-asset bank named Fred C. Schwertfeger to succeed his father, Frederick F. Schwertfeger, according to multiple news outlets. The elder Schwertfeger remains CEO.

Horicon is a unit of Sword Financial. 

The younger Schwertfeger, who previously was chief strategy officer, serves on the board of the bank and the holding company. 

“I’m humbled by the responsibility the board asked of me to care for our communities, our customers and our associates,” the new president told the Washington County Insider. “I enjoy contributing to an organization that strives to make lives better in our communities and look forward to helping their continued growth.”

Primis in Va. to partner with periodontist group

Primis Financial in McLean, Va., has formed a partnership to provide financial services to members of the American Academy of Periodontology. 

The $3.2 billion-asset Primis said in a press release that Panacea Financial, a division formed to serve physicians, dentists and veterinarians, will have access to the AAP's more than 7,500 members.

Periodontists specialize in the prevention, diagnosis and treatment of inflammatory diseases that affect the gums and supporting structures of the teeth. 

"Periodontists deserve service that understands their unique and specific needs and Panacea … provides just that,” Tyler Stafford, the division’s CEO, said in the release. 

Panacea's products include PRN personal loans and practice loans.

BaaS association taps Ohio banker as first chairman

The BHB BaaS Association has its first chairman.

The Austin, Texas, group formed by Bankers Helping Bankers earlier this year to focus on Banking-as-a-Service providers, said in a press release Wednesday that Robert Keil had accepted the role. 

Keil, chief payments officer at Sutton Bank, leads the Attica, Ohio, bank’s BaaS efforts. He previously worked at Fiserv, where he focused on fintechs and emerging payments.

“Community banking is experiencing a number of challenges,” Keil said in the release. 

BaaS “is one offering that enables banks to generate alternative revenue and predictable fee income,” Keil added. “By partnering with select [fintechs] smaller community banks are able to offer banking services to large numbers of the unbanked and underbanked population.”

Associated to close 13 branches in Illinois, Wisconsin

Associated Banc-Corp. in Green Bay, Wis., plans to close 13 branches in two states. 

The $37.2 billion-asset company plans to shutter six locations in Illinois and seven in northwest Wisconsin on Nov. 18, several media publications reported. 

Six of the offices are in-store branches, with five in Festival Foods stores and one inside a Piggly Wiggly.

The branches represent about 6% of the company’s overall network, based on June 2021 data from the Federal Deposit Insurance Corp. 

Associated last year disclosed plans to ramp up investment in digital offerings.

Equity in Kansas to sell Oklahoma branch to High Plains

High Plains Bank in Okeene, Okla., has agreed to buy a branch in Oklahoma from Equity Bancshares in Wichita, Kan. 

The $5 billion-asset Equity said in a press release that it is selling its location in Cordell to the $160 million-asset High Plains. The sale is expected to close by Dec. 31. 

The price wasn’t disclosed. 

The branch has about $20 million of deposits. 

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

“This includes working with strong community banks to ensure that local bank locations continue to appeal to and reflect the customers they serve,” Elliott added. “We believe we’ve found a leadership and customer service team as well as a trusted brand that will continue to serve our customers in Cordell for the long term.” 

Equity entered Oklahoma with the 2017 acquisitions of Eastman National Bank and Patriot National Bank. It expanded in the state by buying City National Bank and Trust.

Mortgage lender gets reg approval to buy Texas bank

Cornerstone Home Lending has received regulatory approval to buy Roscoe State Bank in Roscoe, Texas.

The mortgage lender said in a Wednesday press release that it expects to buy the $226 million-asset Roscoe on or around Oct. 1. 

Cornerstone Capital Bank will have more than $380 million of capital and roughly $1.5 billion of assets. The bank will have three business segments: mortgage lending and servicing, commercial and retail banking and institutional banking. 

"We are delighted to reach this key milestone and look forward to executing plans that will enhance our ability to serve customers and communities nationwide," Marc Laird, Cornerstone’s chairman and CEO, said in the release. 

"We plan to add seasoned commercial bankers to complement our existing team of mortgage lending professionals and offer more products and services to our customers," Laird added.

First Commonwealth to buy Centric Financial in Pa.

First Commonwealth Financial in Indiana, Pa., has agreed to buy Centric Financial in Harrisburg, Pa.

The $9.6 billion-asset First Commonwealth said in a press release Tuesday that it will pay $144 million in stock for the $1.1 billion-asset Centric. The deal, which is expected to close in the first quarter, priced Centric at 131% of its tangible book value. 

Centric has seven branches, a loan production office, $900 million of deposits and $900 million of loans.

“We are genuinely excited about the opportunities that our combined organizations can create,” Mike Price, First Commonwealth’s president and CEO, said in the release. “This extension of our physical presence into Harrisburg and metro Philadelphia allows us to deepen our existing relationships in these markets and improve the financial lives of these businesses and their communities." 

Patti Husic, Centric’s president and CEO, will join First Commonwealth’s board. 

First Commonwealth said that, excluding merger charges, the transaction should be about 5% accretive to its 2023 earnings and roughly 7% accretive the next year. It should take about two years for First Commonwealth to earn back an estimated 3% dilution to its tangible book value.

First Commonwealth plans to cut about 35% of Centric’s annual noninterest expenses. The company expects to incur $14.6 million of pretax merger-related expenses. 

First Commonwealth will eventually lose about $13 million in annual interchange revenue by crossing over $10 billion of assets. 

Keefe, Bruyette & Woods and Squire Patton Boggs (US) advised First Commonwealth. Stephens and Stevens & Lee advised Centric.

First National Bank of Omaha debuts API-focused product

First National Bank of Omaha in Nebraska has formed a business to offer credit card services to fintechs and other startups. 

The $27.2 billion-asset bank said in a press release that Bend by FNBO will offer customized credit card issuance to clients. The business is being marketed as a credit card-as-a-service (CaaS) platform. 

Bend offers an embedded model of open API services for credit cards through a network of strategic partnerships. The platform uses Marqeta’s open APIs and self-service dashboard. 

“In today’s digital world, everything requires flexibility and agility,” Marc Butterfield, head of Bend by FNBO, said in the release. 

“Macro trends like banking-as-a-service and open banking are transforming how digital brands deliver financial products and services to their customers,” Butterfield added. “We’re proud to be one of the first banks to offer modular, embedded credit card solutions to serve the dynamic market.”

Genesis Bank in Calif. forms 1031 exchange division

Genesis Bank in Newport Beach, Calif., has created a division to handle 1031 exchanges. 

The $95.1 million-asset company said in a press release that it had launched Genesis Bank Exchange to facilitate Section 1031 exchanges of investment and business real estate. 

The division will hold client funds in segregated trust accounts and handle administrative, legal and tax-related compliance obligations for clients. 

“We have developed deep relationships … with a broad range of real estate investors, owners and operators, as well as attorneys and commercial real estate brokers,” Stephen Gordon, the bank’s chairman and CEO, said in the release. 

“Such vast experience within our veteran team has enabled us to successfully grow and scale our commercial real estate business since our initial launch and we are now pleased to add Section 1031 exchange capabilities,” Gordon added. 

The announcement comes just weeks after the bank announced plans for an escrow division.

California group clears hurdle to opening new bank

A group in Irvine, Calif., has received approval from the Federal Deposit Insurance Corp. to open a bank.

The FDIC on Aug. 24 gave conditional approval for Beach Cities Commercial Bank. Organizers must raise $25 million before the bank can open. 

The group applied with the FDIC in September. 

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

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

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

The FDIC has approved nine applications for deposit insurance this year, including six in the last two months.

Thumb Bancorp to buy Exchange State in Michigan

Thumb Bancorp in Pigeon, Mich., has agreed to buy Exchange State Bank in Carsonville, Mich.

The $401 million-asset Thumb said in a press release that it will pay $29.9 million in cash and stock for the $219 million-asset Exchange Bank. The merger is expected to close late this year or in early 2023.

The final consideration is subject to adjustment based on unrealized losses in Exchange’s investment portfolio at closing and potential expenses tied to ending the seller’s employee defined benefit plan.

Thumb will convert from an S-Corp to a C-Corp as part of the transaction. 

“This is a unique opportunity to combine with another community bank with a very similar business model and culture,” Ben Schott, Thumb’s president and CEO, said in the release. 

Exchange and Thumb share a strong focus and commitment to community development and customers, further signifying they are the right partner for us,” Schott added.

Kelly Gerstenberger, Exchange’s president and CEO, will join Thumb as a senior officer. Four Exchange directors will join Thumb’s board.

Four suitors pursued GrandSouth in South Carolina

GrandSouth Bancorp. in Greenville, S.C., considered four bids before deciding to negotiate with First Bancorp in Southern Pines, N.C. 

The $10.6 billion-asset First Bancorp agreed to buy the $1.3 billion-asset GrandSouth in June for $181 million of stock. 

GrandSouth’s investment bank contacted 11 potential acquirers in March with the candidates selected because of “their size, capacity to pay and strategic interest in GrandSouth or banks in the South Carolina marketplace,” according to a regulatory filing tied to the pending merger. 

Six of the parties signed nondisclosure agreements to receive confidential information. GrandSouth’s management met with five of them, and four submitted offers on March 31. 

First Bancorp had the highest initial offer, suggesting an all-stock transaction that valued GrandSouth at $38 a share. First Bancorp proposed appointing two GrandSouth directors to its board. 

The next-highest offer valued GrandSouth at $35.69 a share with 70% of the consideration involving stock. The offer proposed putting a GrandSouth director on the suitor’s board while creating a South Carolina advisory board. 

Another institution pitched an all-stock transaction valued at $34.62 a share, adding a GrandSouth director to the combined company’s board and the creation of an advisory board. The fourth bid involved stock and an implied consideration of $31.91 to $35.46 a share. 

The top three bidders were asked to submit new offers, which they did on May 4. 

Based on a 90-day average, First Bancorp had the best offer with a valuation of $39.39 a share. The other proposals valued GrandSouth at $37.28 and $37.82, respectively. 

GrandSouth’s board decided on May 18 to negotiate with First Bancorp. The first draft of the merger agreement was shared less than a week later. The terms of the agreement were largely finalized by June 18. 

The boards of both companies unanimously approved the merger on June 20. 

The deal, which is expected to close late this year or in early 2023, was announced the following day. The transaction priced GrandSouth at 180% of its tangible book value. 

"GrandSouth is in great communities with talented bankers," Mike Mayer, First Bancorp’s president, said in a press release announcing the deal. "Our cultures are very similar and we are excited to bring our teams together."

First Bancorp expects to incur $15 million of merger-related charges. It plans to cut about 30% of GrandSouth's annual noninterest expenses. 

The deal is expected to include high-single-digit accretion to First Bancorp's earnings per share once fully phased in. It should take about three years for First Bancorp to earn back any dilution to its tangible book value. 

James Schwiers, GrandSouth's president, will become president of South Carolina banking at First Bancorp.

WSFS forms health care vertical after hiring Fulton banker

WSFS Financial in Wilmington, Del., has formed a health care banking division after hiring a banker from Fulton Financial. 

The $20.6 billion-asset WSFS said in a press release Monday that Kevin McKeown had become its director of health care banking. He will report to Jim Wechsler, the company’s chief operating officer, commercial banking. 

The group will focus on senior living and long-term care facilities, while building out the expertise and products for other health care businesses. 

“Establishing a health care vertical … positions us well to serve this growing and vibrant industry sector, and we look forward to Kevin’s contributions as he leads these efforts,” Wechsler said in the release.

“Kevin brings nearly 30 years of experience specializing in healthcare financial services to WSFS, and we’re excited for the growth potential as we continue to capitalize on the market opportunity,” Wechsler added. 

McKeown recently served as director of health care banking at Fulton.

Gulf Coast Bank buys equipment finance business

Gulf Coast Bank & Trust in New Orleans has acquired an equipment finance business. 

The $3 billion-asset bank bought the assets of KLC Financial and KLC Capital Partners in Minnetonka, Minn. The price wasn’t disclosed. 

KLC offers leases to vendors and commercial businesses across a national platform. 

“KLC will continue their existing leasing programs but will now have additional resources and reach that will enable them to serve even more customers across the United States,” Guy Williams, Gulf Coast’s chairman, said in the release. 

KLC’s management team “will remain in place and will continue to manage their operations,” Williams added. “There will be no layoffs as a result of this transaction.” 

Marc Keepman is KLC’s founder and chairman. Spencer Thomas is the company’s CEO. 

Piper Sandler, Rinaldi Advisory Services and Avisen Legal advised KLC.

Provident in NJ hires first chief digital officer

Provident Financial Services in Iselin, N.J., has hired an outsider to serve as its first chief digital and innovation officer. 

The $13.7 billion-asset company said in a press release Monday that Ravi Vakacherla had accepted the post, which is a recasting of the bank’s chief information officer role. He also joined Provident’s executive leadership team. 

Vakacharla is responsible for digital initiatives, including strategy, data analytics, innovation, fintech partnerships and IT. He will also monitor digital innovation projects. 

Vakacharla “is highly regarded in his field, he has a collaborative style and approach and is skilled at bringing people and processes together and creating high-performing and unified teams who achieve results,” Anthony Labozzetta, Provident’s president and CEO, said in the release. 

Vakacherla previously served as chief transformation officer at People’s United Financial, which was recently sold to M&T Bank.

First Missouri rebrands as Verimore Bank

First Missouri Bank in Brookfield has a new name. 

The $377 million-asset bank has rebranded as Verimore Bank in a move that deemphasizes location and focuses on products and services. 

The rebranding "is the result of time spent asking bank customers, employees and community leaders about what we do well, where we can improve, and what sets us apart,” Kristie Stuewe, Verimore’s CEO, said in a press release. 

“In response to our customer research, changes will be about offering more big-bank capabilities to our commercial, agricultural and household customers, while continuing to deliver on the relationship-driven service they’ve come to expect,” Stuewe added.

Allegiance, CBTX move merger's termination date

Allegiance Bancshares in Houston and CBTX in Houston have pushed back the termination date of their planned merger. 

The companies disclosed in regulatory filings that the termination date was changed from Aug. 2 to Nov. 1. 

Allegiance and CBTX “remain committed to the merger and obtaining” approval from the Federal Reserve, the companies said.

The Fed is the only entity that hasn’t signed off on the combination. 

The companies, which plan to rebrand as Stellar Bancorp after the deal closes, announced the merger last November. It would create a bank with more than $10 billion of assets.

Bank Slate to provide content to the ABA Banking Journal

The Bank Slate and the American Bankers Association have an agreement where the banking blog will share content with the ABA Banking Journal.

The agreement allows the ABA to pick up select content from The Bank Slate to include in its Daily NewsBytes coverage, with a particular focus on articles about M&A, personnel moves and de novo activity. 

Paul Davis, The Bank Slate's founder, is now a contributor to the ABA Banking Journal.

The collaboration has the potential to grow and expand in coming months.

The Bank Slate will continue to operate its blog and issue a weekly newsletter to subscribers.

Texas Partners division names new president

Bank of San Antonio in Texas has a new president. 

The bank, which is part of the $2.1 billion-asset Texas Partners Bank, said in a press release that Brandi Vitier had taken on the role. She previously served as an executive vice president and market executive.

Vitier, with two colleagues, recently launched Stride, a free entrepreneurial education program for San Antonio business owners offered through a partnership with Texas A&M University-San Antonio.

“The Bank of San Antonio would not have met its growth milestones over the past 15 years without Brandi’s legacy of influence and steadfast leadership,” Brent Given, Texas Partners’ president and CEO, said in the release. 

“There is no one more fitting to be president … and to guide the organization toward future growth in the San Antonio market, Given added.

Former insurance exec becomes MVB's chairman

MVB Financial in Fairmont, W.Va., has a new chairman. 

The $3 billion-asset company said in a press release Thursday that W. Marston Becker had taken on the role. Marston, who joined the board in November 2020, succeeded David Alvarez, who retired. 

"Marty’s leadership and experience have proven to be a great asset to the MVB board … as MVB continues to scale and execute our MVB-F1: Success Loves Speed Strategic Plan,” Larry Mazza, the company’s CEO, said in the release. 

“Marty has more than 35 years of experience in CEO and chairman leadership positions in insurance, reinsurance and insurance brokerage organizations in the U.S. and internationally, as well as insurance-related private equity, advisory and investment banking roles,” Mazza added. 

Becker is a past chairman of QBE Insurance Group, serving in that role from 2014 to 2020. He was president and CEO of Alterra Capital Holdings from 2006 to 2013.

Raj Date joins board of Customers Bancorp in Pa.

Raj Date, the former deputy director of the Consumer Financial Protection Bureau, has joined the board of Customers Bancorp in West Reading, Pa. 

The $20.3 billion-asset company said in a press release that Date, a managing partner of investment and advisory firm Fenway Summer, will serve on its board compliance and risk committees. 

Date is also the co-founder of FS Vector, an advisory firm that counsels fintechs on regulatory strategy, compliance and public policy. 

Date "is a tremendous and multi-talented addition to our Board of Directors,” Jay Sidhu, Customers' chairman and CEO, said in the release. “He understands the nature of our business model and how it is changing and the dynamic public policy context in which we operate.”

The appointment makes sense, given Customers' big push into fintech and digital assets. Those are areas that are drawing significant scrutiny from regulators such as the CFPB.

The Bancorp to pay $1.75M to settle CMBS-related issue

The Bancorp in Wilmington, Del., agreed to pay a nearly $1.8 million penalty to resolve alleged violations tied to commercial mortgage-backed securities (CMBS).

The $7.1 billion-asset company said the settlement was tied to an Aug. 24 order by the Securities and Exchange Commission. The company did not admit or deny wrongdoing.

The SEC, in a July 6 Wells Notice, had alleged that the company had committed violations the Securities Exchange Act, in terms of its record keeping, reporting and internal control provisions, tied to various CMBS.

In addition to the financial penalty, the company agreed to cease and desist from committing or causing any violations of the books-and-records provisions of the Securities Exchange Act.

The Bancorp said it will record a charge in the third quarter to reflect the settlement.

Sumitomo Mitsui Financial Group plans U.S. digital bank

Sumitomo Mitsui Financial Group in Tokyo plans to introduce a digital bank through its U.S. subsidiary.

SMFG said in a press release Wednesday that Jenius Bank will operate as a new division of its $4.3 billion-asset Manufacturers Bank in Los Angeles. 

Jenius will launch in “coming months,” initially offering personal loans before adding savings and checking products. 

“We have the rare opportunity to build exceptional products from scratch that uniquely meet the needs of today’s digitally-native consumers who need and expect more,” Kazuhisa Miyagawa, Manufacturers Bank’s chairman and CEO, said in the release. 

John Rosenfeld will serve as the digital bank’s president. He was the founder and president of Citizens Access, an online direct bank of Citizens Financial Group in Providence, R.I.

Sullivan Bank in Mo. to offer bitcoin, Ethereum services

Sullivan Bank in Sullivan, Mo., will let customers buy, sell and hold bitcoin and Ethereum through a partnership with Bakkt Holdings. 

Bakkt said in a press release that the $836 million-asset Sullivan decided to offer the service to better serve customers’ needs and to increase engagement. 

“We are pleased to work with Sullivan Bank to offer their customers the option to buy bitcoin and ether in their trusted digital banking app,” Mark Elliot, Bakkt’s head of marketing and sales, said in the release. 

“To make the experience seamless for Sullivan Bank and its customers, we provide the full strength of Bakkt’s platform including compliance, tax reporting, educational resources and customer care," Elliot added.

“We are excited to provide opportunities for customers to access a growing and increasingly in-demand asset class with peace of mind with regard to security and regulation,” said Mallory Farrell, Sullivan’s chief operating officer. 

“Bakkt’s innovative platform will facilitate this new capability within our existing banking platform and customers will be able to view their crypto balance alongside their checking and savings balance all in the same place,” Farrell added.

F&M in Va. to benefit from broker-dealer investment

F&M Bank in Timberville, Va., should have a $3.8 million windfall from the sale of one of its investments.

The $1.2 billion-asset company disclosed in a regulatory filing Tuesday that it will benefit from the sale of broker-dealer Infinex Financial Holdings to Advisor Group. 

F&M said it could also receive up to $750,000 from post-closing incentives. 

The company said it expects the transaction to close in the third or fourth quarter.

HBT Financial to buy Town and Country in Illinois

HBT Financial in Bloomington, Ill., has agreed to buy Town and Country Financial in Springfield, Ill.

The $4.2 billion-asset HBT said in a press release that it will pay $101.4 million in cash and stock for the $875 million-asset Town and Country. The deal, which is expected to close in the first quarter, priced Town and Country at 139% of its tangible book value. 

Town and Country has $624 million of loans and $744 million of deposits. 

HBT said it expects the deal to be 17% accretive to its 2023 earnings per share, excluding merger expenses. It should take HBT two years to earn back an estimated 4.7% dilution to its tangible book value.

HBT plans to cut about 28.5% of Town and Country’s annual noninterest expenses. HBT expects to incur roughly $13.5 million of merger-related expenses. 

Town and Country “is a highly compatible franchise that we have respected and admired for a long time,” Fred Drake, HBT’s chairman and CEO, said in the release.

“Operating with a similar relationship-based approach to commercial banking and conservative credit culture, Town and Country has built a high-performing institution with an attractive deposit base,” Drake added. “We believe that combining with Town and Country will help us continue generating profitable growth and create additional value for shareholders in the years ahead.” 

Piper Sandler and Vedder Price advised HBT. Keefe, Bruyette & Woods and Barack Ferrazzano Kirschbaum & Nagelberg advised Town and Country.

Umpqua in Oregon opens CRE office in Denver

Umpqua Holdings in Portland, Ore., has opened a commercial real estate lending office in Denver. 

The $30.1 billion-asset company said in a press release Tuesday that it had opened the office after hiring Todd Grover as its Colorado market leader. 

“Todd is a tremendous CRE professional with a strong reputation for his leadership, customer-focused service and experience as a trusted adviser to his clients," Neil Hodge, Umpqua’s head of commercial real estate, said in the release. 

"Umpqua is thrilled to hire Todd to lead our expansion and leverage our size, resources, and expertise for property owners and development companies seeking to support the vitality and growth in Denver, Phoenix and other Mountain West communities,” Hodge added. 

Grover recently served as a market executive for BBVA USA, leading teams that structured CRE deals in cities such as Denver, Chicago, Dallas, Houston, Los Angeles, Phoenix and San Francisco. 

Earlier this year, Umpqua hired Shawn Thompson to head its middle market banking division in Colorado.

Highland in Minn. to buy Boundary Waters Bank

Highland Bank in St. Paul, Minn., has agreed to buy Boundary Waters Bank in Ely, Minn.

The $630 million-asset Highland said in a press release that it expects to buy the $115 million-asset Boundary Waters by the end of this year. The price wasn’t disclosed. 

“This merger presented an ideal opportunity to expand our organization, blending our individual strengths to provide even greater value to our communities and shareholders alike,” Rick Wall, Highland’s CEO, said in the release. Stephens and Ballard Spahr advised Highland. 

Olsen Palmer and Baird Holm advised Boundary Waters.

American Challenger sues Credit Suisse over nixed merger

American Challenger Development has filed a lawsuit against Credit Suisse and its Cayman Islands branch for their alleged role in the digital bank having to terminate a planned merger with Patriot National Bancorp in Stamford, Conn. 

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 agreed to sell securities to certain investors to raise at least $875 million of capital. 

The two sides agreed in July to call off the proposed merger. 

American Challenger, in a lawsuit filed with the New York Supreme Court, alleges that the deal fall apart after an agreed-upon sale of a $650 million commercial loan portfolio did not occur.

American Challenger said the loan sale was a critical component of its business plan and would have provided immediate revenue streams, according to the Cayman Compass.

“Credit Suisse’s decision to flagrantly renege on its written and binding agreement to sell these critical assets to American Challenger [resulted] in the failure of a merger that American Challenger was poised to complete,” the lawsuit claims. 

American Challenger, which has a digital bank technology and operations platform under the Cache brand, said in July 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.

Truist gaining new tech capabilities through M&A

Truist Financial in Charlotte, N.C., has agreed to buy a data governance platform from Zaloni. 

The $545 billion-asset Truist said in a press release Monday that it will acquire the Zaloni Arena platform, which will also help the company accelerate its expansion into metadata management, advanced analytics, artificial intelligence (AI) and machine learning (ML).

Ben Sharma, Zaloni’s founder and chief product officer, and Ashwin Nayak, the company’s chief technology officer, are part of a Raleigh, N.C., team that will join Truist. 

"Data and analytics are essential to delivering on the needs of our clients, teammates, and stakeholders,” Tracy Daniels, Truist’s chief data officer, said in the release. “I'm thrilled that this deal includes the talented team that built the Arena platform.” 

Zaloni's offshore team will continue serving current clients while also providing technology delivery services to Truist.

Southern First in S.C. taps insider as president

Southern First Bancshares in Greenville, S.C., has a new president. 

The $3.3 billion-asset company said in a press release Monday that Cal Hurst had taken on the role. He previously served as chief banking officer. 

“Cal’s charismatic leadership has been integral to our continued growth and strong company culture,” Art Seaver, the company’s CEO, said in the release. 

“This promotion is in recognition of his tremendous talents and deep commitment to our mission of impacting lives,” Seaver added. “I look forward to building on our accomplishments with Cal’s talents in this new role.”

Westpac, BankSouth invest in AI company

Westpac Banking in Australia and BankSouth in Greensboro, Ga., participated in the latest round of fund-raising for Kasisto, a New York company that developed a virtual assistant the banks use. 

Kasisto, which specializes in conversational artificial intelligence (AI), raised $15.5 million in the funding round, which was led by Westpac and FIS. Kasisto raised $15.5 million earlier this summer. 

"We believe the future of banking experiences will become ever more contextual and will be powered by leading AI technologies that create more engaging interactions for every customer," Stephane Wyper, a senior vice president of FIS Impact Ventures, said in a Monday press release. 

"We are excited to be investing in Kasisto and exploring opportunities to leverage their KAI technology across our digital banking capabilities to more humanize digital consumer interactions," Wyper said. 

"We have seen the successful adoption of conversational AI from our online banking customer base, and both our customers and bankers have found Kasisto's technology to be effective and easy to use," Harold Reynolds, chairman and CEO of the $1.3 billion-asset BankSouth, said in the release. 

"The more we work with this robust platform, the deeper and richer the experience has become for our customers,” Reynolds added.

ICBA opposes Ford's application to form an ILC

The Independent Community Bankers of America has voiced its opposition to Ford Credit Bank becoming an industrial loan company. 

Ford Motor Co. applied for the ILC in late July. The ICBA, which has for years opposed the ILC, argued that approving the application would let Ford “skirt regulatory oversight and violate longstanding U.S. policy separating banking and commerce.” 

The association, in a letter to the Federal Deposit Insurance Corp., expressed concerns that approval would “create outsized risks” for the Deposit Insurance Fund. The ICBA also questioned Ford’s Community Reinvestment Act plan. 

"While ICBA and community bankers continue calling on Congress to close the industrial loan company loophole, Ford’s application to form a new ILC that lacks consolidated oversight would only put the [DIF] and consumers at greater risk,” ICBA President and CEO Rebeca Romero Rainey said in a press release. 

"Any company that wishes to own a full-service bank should be subject to the same restrictions and supervision that apply to any other bank holding company," she added. 

Ford said in its FDIC application that obtaining an ILC would help it make electric vehicles (EVs) accessible to all Americans. Ford Credit Bank would offer loans for EVs through indirect retail installment and lease contracts by auto dealers. 

The bank, which would also make loans directly to consumers, plans to initially offer financing for conventional vehicles.

“Our unique [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. 

Several former bankers are involved in the effort, including Frank Stepan, a former UBS Bank USA executive who would serve as the bank’s president and CEO.

First Bancshares in Miss. combines chairman, CEO roles

First Bancshares in Hattiesburg, Miss., has consolidated the titles of chairman and CEO. 

The $6 billion-asset company said in a press release Friday that CEO Hoppy Cole had also become its chairman. He succeeded E. Ricky Gibson, who remains on the board. 

Ted Parker was named lead independent director. 

Gibson “has been an integral part and significant contributor to the success of our company,” Cole said in the release. “Under his leadership … we have grown from a small local company to a regional bank serving communities in the southeast with over 900 team members and 97 locations.”

Simmons in Ark. hires banker to work on its CRA plan

Simmons First National in Pine Bluff, Ark., has hired an executive to oversee the delivery of its Community Reinvestment Act plan. 

The $27.2 billion-asset company said in a press release Friday that Maurice Butler was named director of community development. 

Butler will also be responsible for developing products and solutions designed to support the needs of low- and moderate-income communities. 

Butler "has a wealth of experience in the banking industry," Joe DiNicolantonio, head of consumer and business banking, said in the release. 

"His connections to the region, paired with his track record, make him an exciting addition to the Simmons' team," DeNicolantonio added.

Butler joined Simmons from First Horizon.

GreenState CU walks away from planned bank purchase

Another credit union has called off a proposed bank acquisition after hitting a roadblock. 

The board of the $10.6 billion-asset GreenState Credit Union in North Liberty, Iowa, has decided to give up on trying to buy the $369 million-asset Premier Bank, according to the Credit Union Times. 

A judge decided earlier this month that the Nebraska Department of Banking and Finance could deny GreenState’s application to buy the Omaha, Neb., bank. 

VyStar Credit Union in Jacksonville, Fla., and Heritage Southeast Bank in Jonesboro, Ga., called off their proposed merger in June after failing to secure regulatory approval. Heritage later agreed to be sold to First Bancshares in Hattiesburg, Miss.

Ponce in N.Y. launches ESG initiative

Ponce Financial Group in Bronx, N.Y., has formed an environmental, social and governance (ESG) committee. 

The $1.7 billion-asset company said the committee is comprised of the executive management team that reports directly to the board. Frank Perez, who was recently named chief investor relations officer, will lead the initiative.

The committee has adopted an ESG charter and policy to oversee and manage Ponce’s ESG initiatives. Ponce plans to conduct a company-wide assessment of its energy infrastructure to develop “greener and greater results” while optimizing cost-saving measures. 

The process will include an ongoing full-facility energy audit to assess and address material gaps.

The company is in the early stages of conducting an ESG materiality assessment to better understand how to align its strategy with ESG priorities. The assessment should be completed during the fourth quarter. 

“We are looking forward to taking this ESG journey and expect to benefit in several ways in areas such as strategy, risk management and stakeholder loyalty,” Carlos Naudon, Ponce’s president and CEO, said in the release. 

"We firmly believe that the ESG initiative will enhance our ability to evaluate opportunities and risks over the short and long term,” Naudon added. “As an MDI and CDFI, we are keenly aware that the populations we serve – underbanked and underserved – are increasingly adversely impacted by climate change and social economic developments.”

United Community adds former Truist exec to its board

United Community Banks in Greenville, S.C., has added a former Truist Financial executive to its board.

The $24.2 billion-asset company said in a press release Thursday that George Bell had become a director. Bell recently served as software engineering group head at Truist. He also worked at Truist predecessor BB&T and Bank of America. 

Bell “embodies a skillset identified by our Board as essential to the growth of our company and we are honored to welcome him aboard,” Lynn Harton, United Community’s chairman and CEO, said in the release. 

 “I had the honor of working with George early in our careers and have always been impressed with his intelligence and understanding of the industry,” Harton, who once worked at BB&T, added. “His impeccable track record of leveraging leading technology and enabling customer-centric innovation will be particularly helpful to our team as our business continues to grow across some of the fastest-growing markets in the Southeast.”

Puerto Rico de novo identifies proposed CEO

Organizers of the proposed Nave Bank in San Juan, Puerto Rico, have tapped a veteran banker to serve as its chairman and CEO. 

The group disclosed in an amended application with the Federal Deposit Insurance Corp. that Carlos Garcia would also serve as chairman and CEO of Nave Holdings, the bank’s proposed holding company. 

Garcia, who is also set to become president of commercial banking, is a director at Professional Holding and its bank. Professional recently agreed to be sold to Seacoast Banking Corp. of Florida; organizers said Garcia will not join Seacoast’s board. 

The organizing group noted that Juan Davila Lopez, another proposed director, is a senior vice president at Bank of the West in San Francisco. 

The group noted in its previous application that it will rely heavily on digital channels. The prior application redacted the section disclosing who would serve as CEO. 

Organizers plan to conduct a private placement to provide capital for Nave Holdings, which would then capitalize the bank.

TowneBank to buy Farmers Bankshares in Virginia

TowneBank in Suffolk, Va., has agreed to buy Farmers Bankshares in Windsor, Va.

The $16.9 billion-asset TowneBank said in a press release Thursday that it will pay $56 million in stock for the $609 million-asset Farmers. The deal, which is expected to close in the first quarter, priced Farmers at 196% of its tangible book value.

TowneBank will enter Isle of Wight and Southampton counties when the deal is completed. Farmers has eight branches, $277 million of loans and $521 million of deposits.

Farmers also owns Manry Rawls, an insurance brokerage with $6 million of annual revenue.

“We believe our partnership can bring additional products and expanded services to the clients of Farmers Bank while helping our communities grow and prosper,” G. Robert Aston Jr., TowneBank’s executive chairman, said in the release. 

TowneBank said it expects the merger to be about 5% accretive to earnings per share, including planned cost savings. TowneBank said it should take less than three years to earn back less than 3% dilution to its tangible book value. 

TowneBank plans to cut 35% of Farmers' annual noninterest expenses; three Farmers branches are within five miles of a TowneBank location. TowneBank expects to incur $9.6 million of merger-related expenses.

Raymond James and Troutman Pepper Hamilton Sanders advised TowneBank. Piper Sandler and Williams Mullen advised Farmers.

Northwest in Ohio names permanent CEO

Northwest Bancshares in Columbus, Ohio, has a new CEO.

The $14 billion-asset company said in a press release Thursday that Louis Torchio will also serve as its president. Torchio, who joined the company in 2018, recently served as senior executive vice president of retail lending and business banking. 

Before he joined Northwest, Torchio held senior leadership and executive committee posts at Charter One Bank, Bank One and Mellon Bank. 

At Northwest, Torchio supervised the expansion of the company's residential lending and indirect lending groups. He also launched an initiative to develop and expand the business banking and Small Business Administration lending divisions. 

Torchio succeeded William Harvey, Jr., who had been interim president and CEO since the unexpected death of Ronald Seiffert in May. Harvey, who remains chief financial officer, was named chief operating officer. 

Torchio and Harvey were appointed to the Northwest board. Timothy Fannin, who has been serving as interim chairman since Seiffert's death, will retain that post.

“Lou’s strong familiarity with our organization and depth of industry experience make him the ideal person to lead Northwest Bank into its next era as a growing, successful and independent financial institution," Fannin said in the release. 

"As we continue to execute our strategic plan, the board ... and I are excited about what the future holds for Northwest under the extremely capable leadership of Lou, Bill and the rest of our Northwest executive leadership team," Fannin added.

BofA overdraft fees down 90% from year earlier

Bank of America in Charlotte, N.C., said its overdraft-service fees in June and July fell by 90% from a year earlier, reflecting policies designed to back off of such charges. 

The $2.2 trillion-asset BofA said in a Wednesday press release that consumer client overdraft fees made up less than 0.4% of its total revenue in the second quarter. 

For consumer accounts, the company eliminated nonsufficient funds (NSF) fees and reduced overdraft fees from $35 to $10. A checking account that lets customers avoid overdraft fees now represents about 45% of new account openings.

“Our scale, client focus and technology investments have allowed us to adopt policies and innovate in ways that help clients manage their everyday finances and liquidity needs on their own terms, while also delivering for our shareholders,” Holly O’Neill, Bank of America’s president of retail banking, said in the release. 

BofA said that, by next year, consumer overdraft fees will be down 97% from 2009 levels.

A growing number of banks are eliminating or reducing overdraft and NSF fees. Regulators, including the Consumer Financial Protection Bureau, are also giving more scrutiny to such charges.

Live Oak in N.C. set to benefit from Payrailz sale

Live Oak Bancshares in Wilmington, N.C., is set to benefit from the pending sale of Payrailz to Jack Henry & Associates. 

The $9.1 billion-asset Live Oak disclosed in a regulatory filing that it expects to report a $29 million pretax gain tied to its investment in Payrailz. The gain would be recorded when the acquisition closes. 

The announcement comes months after Live Oak said it would likely realize a $115 million pretax gain from its investment in Finxact, which agreed to be sold to Fiserv.

Proposed N.H. mutual hits capital goal

The organizers of Walden Mutual Bank in Concord, N.H., has exceeded its capital goal. 

The group said in an email that they have secured more than $20 million of commitments. The plan is to open the mutual in late summer. 

Walden has received approval from the New Hamphsire Banking Department but it still needs a greenlight from the Federal Deposit Insurance Corp. 

"The participation and support we've received from you have been incredibly meaningful to us, but also pivotal to showing that a new mutual in 2022 can be propelled by the community at scale," the email said. "We very much appreciate your confidence in our team, our mission, and the opportunity in front of us."

BOK Financial taps new CEO for Bank of Texas

BOK Financial in Tulsa, Okla., has named a new CEO for Bank of Texas. 

The $45 billion-asset company said in a press release Wednesday that Mark Wade will take over the post on Jan. 1. He will succeed Norm Bagwell, who previously announced plans to retire.

“Norm Bagwell has been an important part of our company since he joined us in 2008,” Stacy Kymes, BOK Financial’s president and CEO, said in the release. “We are thrilled that he will continue to play an important role in client development and employee recruiting talent in Texas as he transitions out of the CEO role."

Wade joined BOK Financial in 2001 as the Dallas corporate banking manager for Bank of Texas. He helped to launch the company’s health care banking division and formed the commercial finance group.

Wade has been Bank of Texas’ president and chief operating officer since 2008. He is also executive director for BOK Financial’s commercial banking business line.

Republic First: Review of related-party dealings completed

Republic First Bancorp in Philadelphia is one step closer to getting caught up on its regulatory filings.

The $5.7 billion-asset company said in a press release that Wilmer Cutler Pickering Hale and Dorr, an outside firm, has completed its review of related-party transactions, certain internal controls and “associated financial statement and disclosure implications.” 

The results are being evaluated by Republic First’s audit committee, management and an independent registered public accounting firm. As a result, the company is not yet ready to file its financial reports for the first and second quarters. 

Republic First has until Sept. 27 to file the reports and regain compliance with the Nasdaq. 

The company disclosed in early April that its auditors, as part of a review of its 2021 financial statements, advised management and the chairman of the audit committee that it thought an independent investigation should be conducted. The related-party transactions are the subject of pending litigation against Republic First. 

The company recently reappointed Harry Madonna as chairman and CEO, albeit in an interim capacity, following the resignation of Vernon Hill Jr.

Former Eagle Bancorp CEO barred from banking industry

Ronald Paul, who abruptly stepped down as chairman and CEO of Eagle Bancorp in Bethesda, Md., in 2019, has been barred from the banking industry.

The Federal Reserve also fined Paul $90,000 after the former executive agreed to resolve claims he and the $10.9 billion-asset Eagle made negligently false and misleading statements about related-party loans tied to his business interests.

EagleBank agreed to pay a $9.5 million fine for violating the Fed's insider lending regulations.

Separately, Eagle agreed to pay disgorgement of $2.6 million, prejudgment interest of $750,493 and a $10 million civil penalty to address claims by the Securities and Exchange Commission.

Paul, in his arrangement with the SEC, agreed to pay disgorgement of $109,000, prejudgment interest of $22,216 and a $300,000 penalty. 

Eagle and Paul reached the agreements without admitting or denying wrongdoing. 

The SEC, in a complaint filed in U.S. District Court for the Southern District of New York, alleged that Eagle, from March 2015 to April 2018, failed to include loans to Paul’s family trusts – totaling at times nearly $90 million – in the related-party loan balances included in its annual reports and proxy statements. 

The commission’s order found that Eagle improperly omitted tens of millions of dollars of loans to company directors and their family members from these related-party loan balances. 

Finally, the order determined that, after a December 2017 report asserting Eagle had made significant undisclosed loans to Paul’s family trusts, the company and its CEO falsely stated in press releases, news articles and investor meetings that the loans were not related-party loans. 

"Adequate disclosures of related-party transactions are essential to enable investors to evaluate an issuer’s corporate governance,” Sanjay Wadhwa, deputy director of the SEC’s enforcement division, said in the release. “Faced with a short seller’s report alleging undisclosed related party loans by the bank, both Eagle and Paul failed to respond truthfully and accurately.”

First Horizon sells title insurance subsidiary

First Horizon in Memphis, Tenn., has sold its title insurance subsidiary. 

The $43.7 billion-asset company sold Lenders Title Group to Knox-Precision Holdings. The price wasn’t disclosed.

“Our historical success is due to the hard work and dedication of our title associates and the confidence our clients have in us, all backed by the support of our banking colleagues throughout the years,” Beau Fast, Lenders Title’s president and CEO, said in a Tuesday press release. 

“Our team now has a chance to continue to flourish as a part of Knox-Precision Holdings, an organization dedicated to title and closing services," Fast added. 

First Horizon is in the process of selling itself to TD Bank.

M&T hires BofA exec as its chief digital officer

M&T Bank in Buffalo, N.Y., has hired an executive from Bank of America to become its chief digital officer. 

The $204 billion-asset M&T said in a press release Tuesday that Ishet Dhar will focus on the role digital plays in creating simple, differentiated experiences for clients and employees. He will report to Christopher Kay, M&T’s head of consumer/business banking. 

Dhar previously served as senior vice president of digital consumer delivery at Bank of America.

Dhar "will supercharge our digital transformation at M&T, driving new technology innovation and experiences for our customers and communities," Kay said in the release. "He will be focused on delivering value for our customers, while giving our bankers the tools they need to be a source of support and guidance in the communities where we live and work.” 

"My goal is to make it easier for customers across our communities to access the services and solutions they need — wherever, whenever they need them — to help them achieve their financial goals and make a difference in their lives," Dhar said. 

Dhar will be based in M&T's regional headquarters in Wilmington, Del.

Central Bank of Kansas City spins off payments business

Central Bank of Kansas City in Missouri has spun off its payments and card-issuing platform after the business raised $30 million. 

Central Payments, founded in 2014 as part of the $350 million-asset Central, said in a press release that it raised funds from investors that include Castle Creek Capital and Launchpad Capital. Central will remain an investor in Central Payments. 

“Since inception, we have remained steadfast in our belief that new technology and the stability of a bank charter create opportunity for banks in fintech and embedded finance when others may have perceived a threat,” Trent Sorbe, Central Payments’ president, said in the release. 

The Castle Creek Launchpad Fund I has raised $90 million from 34 community banks to make investments. Central Payments plans to launch a fintech accelerator later this year. 

“We’re backing innovators and new financial technologies,” Ryan Gilbert, Launchpad’s founder, said in the release. “Central Payments’ origin inside a community bank and its positioning at the intersection of banking, payments and fintech made it an ideal first investment for our new fund.”

ICBA-backed firm BankTech Ventures closes first fund

BankTech Ventures in Sandy, Utah, has closed on its first fund after bringing in more than $115 million in capital commitments. 

BankTech said in a press release Monday that the initial round included more than 100 limited partners, comprised almost entirely of community banks. The firm has made eight investments since its first closing in November. 

“It’s been a whirlwind nine months since we launched BTV,” Carey Ransom, the firm’s managing director, said in the release. 

“The support and engagement that we have already received from our community banks has been better than we anticipated,” Ransom added. 

The firm’s limited partners “and portfolio companies are seeing the exponential impact of this strategy and we are becoming a strategic and distribution partner for technology companies instead of solely a capital partner,” Carson Lappetito, president of SunWest Bank and a BankTech general partner, said in the release. 

The firm’s general partners include Sunwest, Coastal Financial, Hovde Group, The Venture Center and the Independent Community Bankers of America.