Square makes multimillion investment in Arkansas CDFI

Square has made a multimillion investment in Southern Bancorp in Arkadelphia, Ark.

Square said in a press release Thursday that it had invested the final $25 million of a $100 million commitment to minority and underserved communities. The $1.9 billion-asset Southern said in a separate release that it had received funds from that investment. 

“We are appreciative to Square, Inc. for both their commitment and their vision for reaching minority and underserved communities,” Darrin William, Southern Bancorp’s CEO, said in a Thursday press release. 

“This investment will allow us to further expand our reach and impact to underserved communities, undercapitalized small businesses and underbanked families seeking to build wealth for a better future,” Williams added.

Southern, a community development financial institution, was founded in 1986 with $10 million. The company now has 52 locations and serves 65,000 customers.

CB Financial selling two West Virginia branches

CB Financial Services in Washington, Pa., has agreed to sell two branches to Citizens Financial in Elkins, W.Va.

The $1.5 billion-asset CB Financial said in a press release Thursday that it will sell the West Virginia locations, in Buckhannon and New Martinsville, along with $101.9 million of deposits and $6.3 million of loans.

The $340 million-asset Citizens will pay a 5% deposit premium for the deposits transferred. The deal is expected to close in the fourth quarter.

The sales are part of a branch optimization strategy CB Financial announced in February.

CB Financial said the sale will allow it to focus on its core markets in southwestern Pennsylvania. It also plans to close six other branches, reducing its overall footprint to 14 locations.

The branches being sold “are much closer to Citizens’ headquarters and centralized operations,” John Montgomery, CB Financial’s president and CEO, said in the release.

“This transaction allows our company to focus our growth on our core markets,” Montgomery added. “We remain focused on increasing efficiency and investing in digital marketing and technology enhancements.”

D.A. Davidson and Luse Gorman advised CB Financial. Ategra Capital Management and Jackson Kelly advised Citizens.

Organizers plan de novo bank in southwest Florida

A group is looking to form a bank in Ft. Myers, Fla.

Organizers of Gulf Coast Business Bank filed an application with the Federal Deposit Insurance Corp. on Wednesday for deposit insurance.

The group plans to raise $20 million in initial capital, according to the application.

William Blevins is listed as the proposed bank's president, CEO and chief lending officer. 

Blevins was a commercial loan officer at Wachovia Bank and Wells Fargo from 1993 to 2011. He was in charge of the loan department at Encore Bank in 2018 when it was sold to Lake Michigan Credit Union.

Efforts to reach Blevins were unsuccessful.

Ohio bank aims to become CDFI as part of pending sale

Community Savings Bancorp in Caldwell, Ohio, has agreed to be sold to an entity owned by former Pacific Union Financial CEO Evan Stone. 

Double Bottomline, which is owned by Stone, will pay $9.5 million for the $60 million-asset parent of Community Savings. The deal is expected to close in the fourth quarter.

Community Savings has applied to the Treasury Department to become a community development financial institution. The transaction is expected to expand the bank’s mission to serve low- and moderate-income communities while expanding its products and services to the underbanked and unbanked.

Stone said in a Wednesday press release that he intends to maintain the bank’s existing footprint.

“We are honored to begin the process of doing our part to address the needs of so many who are without basic banking products and services,” Stone said in the release. “Having Community Savings become a CDFI is one step in that process.”

Stone founded nonbank mortgage lender Pacific Union in 2004, selling the company in February 2019 to Mr. Cooper Group. He is currently a fund manager at EMS Fund I, a Texas company backed by his family office.

John Gulas, former president and CEO of Trinity Capital in Los Alamos, N.M. and a director of Quontic Bank, is expected to join the bank. Trinity was sold to Enterprise Financial Services in Clayton, Mo., in 2019. 

Alvin Parmiter will remain Community Savings’ CEO.

Hunton Andrews Kurth advised Double Bottomline. Boenning & Scattergood and Luse Gorman advised Community Savings.

Ponce Bank in N.Y. to record gain from sale-leaseback

PDL Community Bancorp in New York expects to record a pretax gain of $4.2 million after completing a sale-leaseback transaction.

The $1.4 billion-asset parent of Ponce Bank said in a press release Tuesday that it sold a property in Bronx, N.Y., for $5.7 million on June 4. The property had a net book value of $1.1 million on April 30. 

The bank entered into a 15- year lease agreement with an initial base annual rent of $281,000, subject to annual rent increases of 1.75%.

"We are excited about the sale … and look forward to continuing to provide the excellent products and customer service that Ponce Bank has always been known for in the immediate neighborhood,” Carlos Naudon, the company’s president and CEO, said in the release. 

“More importantly, 2021 will continue to be a year of investing ─ in the safety of our people and the future of our organization and our communities ─ with the clear goal of enhancing stakeholder values,” Naudon added.

Regions buying home-improvement lender for $960M

Regions Financial in Birmingham, Ala., has agreed to buy EnerBank USA, a home improvement lender based in Salt Lake City.

The $153 billion-asset Regions said in a press release Tuesday that it will pay $960 million for the $3.1 billion-asset industrial loan company. The deal is expected to close in the fourth quarter.

EnerBank has served more than a million homeowners and 10,000 contractors through mobile, online and phone-based point-of-sale lending options. It had 450 employees and $2.8 billion of loan balances on March 31.

The acquisition comes roughly two years after Regions exited its relationship with point-of-sale home improvement lender GreenSky. At the time, Regions said it hoped to pursue more direct relationships with borrowers. 

The deal, nicknamed Project Eclipse, is the latest niche acquisition for Regions, which bought equipment finance lender Ascentium Capital last year and institutional investment firm Highland Associates in 2019. 

“We have thoughtfully evaluated the home improvement point-of-sale lending space for a number of years, and we believe this is the right partner at the right time to deliver on our vision,” Scott Peters, head of the consumer banking group at Regions Bank, said in the release.

“EnerBank’s platform and skilled financial professionals, combined with the reach and experience of Regions’ consumer banking teams, will help us deepen relationships with clients while reaching new customers with convenient home improvement lending options,” Peters added. 

Charlie Knadler, Enerbank’s president and CEO, and his team will join Regions’ consumer banking group, reporting to Peters. EnerBank will keep its headquarters.

Home Depot applied to acquire EnerBank in 2006, but ended up withdrawing its application two years later amid opposition to retailers owning industrial loan companies.

“The deal is small enough that it should only be 1%-2% dilutive to tangible book value per share, including CECL double-count and forgone share repurchases,” Stephen Scouten, an analyst at Piper Sandler, wrote in a note to clients.

“High level, this deal fits Regions’ bolt-on M&A strategy aimed at expanding the bank's product suite while also offering attractive growth opportunities,” Stephen Scouten, an analyst at Piper Sandler, wrote in a note to clients. “We think that this deal is a better use of capital than share repurchases, as it builds franchise value, will add 10 to 15 basis points to the core net interest margin … and offer an attractive outlet for excess liquidity.”

"We think the price paid is slightly high due to TBV dilution, but it is still worthy of solid incremental returns on capital," Chris Marinac, an analyst at Janney Montgomery Scott, wrote in his client note. 

Marinac noted that loans, as a percentage of earning assets, at Regions had fallen from 75% at the end of 2019 to 62% on March 31. "Investors must recognize that Regions is deploying excess cash and liquidity with the acquisition," he added.

Stephens and Sullivan & Cromwell advised Regions. Goldman Sachs and Skadden, Arps, Slate, Meagher & Flom advised CMS Energy, which is selling EnerBank.

FB Financial's biggest shareholder reducing stake

The biggest shareholder at FB Financial in Nashville, Tenn., is selling a large block of stock.

The $11.9 billion-asset company disclosed in a regulatory filing Monday that Jim Ayers, its founder and vice chairman, plans to sell 2.5 million shares in a secondary offering. The stock is worth roughly $104.4 million based on the company closing price the day of the filing.

The stock represents about 5.3% of FB Financial’s outstanding shares, as of March 31.

The sales will lower his stake in the company from 28.8% to 23.5%, the filing said.

“We are not entirely surprised to see Ayers … liquidate some of his [roughly $580 million] position as uncertainty around capital gains tax policy looms,” Stephen Scouten, an analyst at Piper Sandler, wrote in a note to clients.

“Ayers currently has no additional plans for similar transactions,” Scouten added. “Ayers still plays an active role in FB Financial's strategic direction as vice chairman … and we do not think he is interested in diminishing his influence any time soon.”