Warren-led group wants OCC to block TD-First Horizon

A group of legislators led by Sen. Elizabeth Warren, D-Mass., wants the Office of the Comptroller of the Currency to reject TD Bank Group’s planned purchase of First Horizon in Memphis, Tenn. 

The lawmakers, which include Reps. Katie Porter, D-Calif., Al Green, D-Texas, and Jesus Garcia, D-Ill., are citing a May 4 report that claimed the Canadian bank had similar incentives to those tied to the fake-accounts scandal at Wells Fargo. 

“As TD Bank seeks approval from your agency to increase their market share and become the sixth-largest bank in the U.S., the OCC should closely examine any ongoing wrongdoing and block any merger until TD Bank is held responsible for its abusive practices,” the lawmakers wrote in a letter to Comptroller Michael Hsu.

The letter points to a 2017 investigation into the bank’s practices, while pressing the OCC to publicly release its findings from that probe. 

TD Bank, which agreed in February to buy First Horizon for $13.4 billion, said in a statement to the media that the report’s findings were “unfounded,” adding that it “strongly” disagrees with the report’s “characterization of information presented as facts.”

The bank’s compensation practices “are carefully and actively managed,” the statement added. “We vehemently object to any allegations of systemic sales practice issues, or any other claims alleged in the article.”

M&T's president to retire in 2023

M&T Bank in Buffalo, N.Y., announced that its president will retire. 

The $149.9 billion-asset company said in a press release Thursday that Rich Gold will also step down as chief operating officer, effective after the first quarter of 2023. He will remain on the board.

“It’s difficult to overstate Rich’s impact on our company, said René Jones, M&T’s chairman and CEO, said in the release. 

“It has been his life’s work to instill and perpetuate a culture that we all take pride in — one that allows us to operate with a sense of purpose and feel as though we are a part of something larger,” Jones added. “That focus on culture, coupled with a keen ability to identify and cultivate leaders, has ensured that we have an outstanding talent base to carry our purpose forward and continue to make a difference in people’s lives.” 

Gold joined M&T in 1989. He became president and COO in 2017. 

M&T did not disclose any plans for replacing Gold.

VyStar-Heritage Southeast terminate planned merger

VyStar Credit Union in Jacksonville, Fla., and Heritage Southeast Bancorp. have terminated VyStar’s planned acquisition of Heritage Southeast Bank in Jonesboro, Ga., after failing to secure regulatory approval. 

The $12 billion-asset VyStar and the $1.7 billion-asset Heritage Southeast were nearing a June 30 closing deadline. The parties had repeatedly extended the deadline. 

“After much contemplation and discussion, the [boards] of both institutions concluded the best path forward would be to discontinue the proposed transaction … as all required regulatory approvals would not be obtained in a timely manner,” Leonard Moreland, Heritage Southeast’s CEO, said in a Wednesday press release. 

The termination positions Heritage Southeast “to benefit from an improved post-COVID 19 economic climate, stronger capital position and focus on the consistent growth and value creation we have delivered through the years,” Moreland added. “Additional strategic initiatives that have been delayed and designed to improve efficiencies can now be pursued along with strategic partnerships that will enhance shareholder value.” 

“VyStar will continue to expand our services in Georgia,” Brian Wolfburg, the credit union’s president and CEO, said. “We would like to extend our sincere appreciation to both the VyStar and [Heritage Southeast] teams that worked diligently throughout an extensive process.”

Each company will bear its own costs and expenses in connection with the terminated transaction. Neither party will pay a termination fee. 

The acquisition, announced in March 2021, would have been the biggest sale of a bank to a credit union.

VyStar had been juggling the proposed merger and service issues stepping from last month's adoption of a new web and mobile banking platform. The conversion led to members being unable to conduct transactions on its mobile app.

F&M Bancorp to buy Peoples-Sidney in Ohio

Farmers & Merchants Bancorp in Archbold, Ohio, has agreed to buy Peoples-Sidney Financial in Sidney, Ohio. 

The $2.6 billion-asset F&M said in a press release Tuesday that it will pay $27 million in cash and stock for the $133 million-asset parent of Peoples Federal Savings and Loan Association. The deal, which is expected to close in the third or fourth quarter, priced Peoples-Sidney at 175% of its tangible book value.

Peoples has four branches, $100 million of loans and $115 million of deposits. 

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

“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. 

Peoples is the fifth acquisition for F&M since the end of 2018. 

F&M said it 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. It expects to incur $3 million of merger-related charges.

F&M was advised by Piper Sandler and Shumaker, Loop & Kendrick. Peoples was advised by Boenning & Scattergood and Vorys, Sater, Seymour and Pease.

Former bank CEO added to Codorus Valley board

Codorus Valley Bancorp in York, Pa., has added a veteran banker to its board. 

The $2.3 billion-asset company said in a press release Tuesday that Scott Fainor had also joined its risk management committee. 

Fainor was president and CEO of National Penn Bancshares when it was sold to BB&T in April 2016. He was a group executive at BB&T about until 2019; he is now chairman of Fainor Holdings. 

The company also appointed Kent Matsumoto to its board. Matsumoto, who was legal counsel at several publicly traded companies during his career, is already a director of Codorus Valley’s bank. 

The appointments come two months after Codorus Valley reached a truce with Driver Management, an activist investor that had pushed the company to find a buyer. 

Codorus Valley had previously added John Kiernan, a Driver-proposed director nominee, to its board. The company agreed to select a second director and to work with Driver to “identify a third new director with substantial public company board experience from the banking sector.”

Buckeye State Bank to buy First City in Ohio

Buckeye State Bank in Powell, Ohio, has agreed to buy First City Bank in Columbus, Ohio.

The $263 million-asset Buckeye said in a press release that it expects to buy the $73 million-asset First City in the fourth quarter. It did not disclose the price it will pay. 

First City has one branch and $64 million of deposits. Buckeye was acquired by a group of local investors led by CEO Shawn Keller in 2014. 

"As an employee-owned community bank, we believe this is a rare opportunity to acquire a like-minded financial institution for the benefit of our communities and our shareholders,” Keller said in the release.

Performance Trust and Dinsmore & Shohl advised Buckeye. Keller and Co. and Becker & Lilly advised First City.

CrossFirst to enter Colorado, NM with F&S acquisition

CrossFirst Bankshares in Leawood, Kan., will enter Colorado and New Mexico as part of an agreement to buy Farmers & Stockmens Bank in Clayton, N.M.

The $5.6 billion-asset CrossFirst said in a press release Tuesday that it will pay $75 million in cash to Central Bancorp for the $567 million-asset F&S Bank. The deal, which is expected to close in the second half of this year, priced F&S Bank at 163% of its tangible book value. 

Central will keep its wealth management units. 

CrossFirst plans to incorporate F&S Bank’s Small Business Administration and agricultural lending capabilities into its current platform. 

“This transaction represents an exciting milestone for our company, allowing us to enter new, dynamic markets, and expand our capabilities by partnering with an impressive team of bankers,” Mike Maddox, CrossFirst’s president and CEO, said in the release. 

Scott Page, F&S Bank’s CEO, will join CrossFirst. 

The transaction is expected to be 11.7%, accretive to CrossFirst’s 2023 earnings per share, assuming fully phased-in cost savings. It should take less than three years for the company to earn back an estimated 5.8% dilution to its tangible book value. 

CrossFirst plans to cut about 20% of F&S Bank’s annual noninterest expenses. The company expects to incur $3 million of merger-related charges.

CrossFirst was advised by Keefe, Bruyette & Woods and Stinson. Central was advised by Piper Sandler and Otteson Shapiro.