Capital Bank in Md. taps insider to oversee fintech business

Capital Bank in Rockville, Md., has tapped an insider to run its fintech business. 

The $2.2 billion-asset bank said in a press release that Karl Dicker had become president of OpenSky and fintech. OpenSky is the bank’s secured Visa credit card. 

“Karl has been instrumental in the development and growth of OpenSky,” Ed Barry, Capital’s CEO, said in the release. “Allowing him to narrow his attention to these lucrative growth opportunities is in parallel with our strategic plan.” 

Dicker previously served as the bank’s chief operating officer. 

Capital said that Steven Poynot had succeeded Dicker as COO. Poynot previously served as COO at F&M Trust. Before that, he was chief information officer at Howard Bank. 

“We are thrilled to have Steve join our senior management team,” Barry said. “His background and experience add to the depth and knowledge of our team and will serve our bank well as we continue executing on our strategic plan.”

Investment adviser team leaves Atlantic Union to form firm

Four investment advisers have left Atlantic Union Bankshares in Richmond, Va., to form their own firm.

Dover Advisors was launched in August after the adviser left the $19.7 billion-asset Atlantic Union’s wealth management division, according to Richmond BizSense. 

The firm’s president, Jess Ellington, had been the bank’s chief investment officer. He had led the bank’s registered investment adviser division, which was sold to Cary Street Partners. 

Ellington and the other investment advisers were at Middleburg Trust, which was sold to Access National Bank in 2017. Atlantic Union bought Access National two years later. 

Dover Advisers also said John Mason Antrim, who worked with the other advisers at Middleburg Trust, had also joined the team. 

The firm has around $100 million in assets under management.

State Street hires Google exec to handle global compliance

State Street in Boston has hired a former Google executive to serve as its global chief compliance officer.

The $300 billion-asset company said in a press release that Yvette Hollingsworth Clark will report to Brad Hu, its global head of risk. She will also be accountable to the board’s examining and audit committee.

Hollingsworth Clark will oversee compliance activities that include designing and implementing structures and processes to enhance governance and controls.

“Understanding and effectively managing risk in a dynamic environment is absolutely critical to achieving our business goals,” Hu said in the release. 

"Yvette is a respected professional in compliance risk management, with a strong record of building and leading effective AML and compliance frameworks at global financial institutions,” Hu added.

Hollingsworth Clark recently served as head of compliance in the consumer trust business at Google. She has also held leadership roles at Barclays Capital, Citigroup and Wells Fargo. She was also a bank regulator and supervisor at the Federal Reserve.

BNY Mellon forms platform to manage digital assets

Bank of New York Mellon has formed a platform to manage digital assets. 

The $438 billion-asset company said in a press release that its digital asset custody platform allows clients to hold and transfer bitcoin and ether. 

The move comes a year after BNY Mellon formed a unit to develop solutions for digital asset technology.

"Touching more than 20% of the world's investable assets, BNY Mellon has the scale to reimagine financial markets through blockchain technology and digital assets," Robin Vince, the company’s president and CEO, said in the release. 

BNY Mellon, which has been working closely with several fintechs, said it integrated technology from Fireblocks and Chainalysis to meet the security and compliance needs of the bank’s clients.

Prosperity Bancshares buying two Texas banks for $570M

David Zalman is back in the M&A game with two acquisitions.

Prosperity Bancshares in Houston has agreed to buy Lone Star State Bancshares in Lubbock, Texas, and First Bancshares of Texas in Midland, marking Prosperity’s first bank deals since it bought LegacyTexas Financial Group in 2019. 

The $37.4 billion-asset Prosperity will pay $228.7 million in cash and stock for the $1.3 billion-asset Lone Star. The deal, which is expected to close in the first quarter, priced Lone Star at 189% of its tangible book value.

Lone Star has five branches, $934 million of loans and $1.2 billion of deposits. 

Alan Lackey, Lone Star’s CEO, will join Prosperity as its west Texas area president. Melisa Roberts, Lone Star’s chief lending officer, will become west Texas area vice president. 

“We continue to look for opportunities to enhance our presence in the west Texas area,” Zalman, Prosperity’s senior chairman and CEO, said in a press release. Lone Star’s “locations in Lubbock, Midland/Odessa, Big Spring and surrounding areas are an excellent fit for us.”

Separately, Prosperity will pay $341.6 million for the $2.1 billion-asset First Bancshares. The deal, which is expected to close in the first quarter, priced First Bancshares at 162% of its tangible book value. First Bancshares has 16 branches, $1.6 billion of loans and $1.8 billion of deposits. 

Ken Burgess, First Bancshares’ CEO, along with Brad Burgess, Greg Burgess and Jeremy Bishop, will join Prosperity as regional presidents overseeing specific geographic markets in west Texas and central Texas. 

The acquisition “enables us to enter the desirable Wichita Falls and Amarillo markets and the Horseshoe Bay, Marble Falls and Fredericksburg markets in the high-growth central Texas area,” Zalman said in a separate release. 

Prosperity said it will cut about a quarter of each seller's annual noninterest expenses. It expects to incur about $27.1 million of merger-related expenses tied to both acquisitions.

About $1.5 million of aggregate annual interchange revenue from the selling banks will be lost due to the Durbin Amendment.

The deals should be about 5.9% accretive to Prosperity's 2023 earnings per share, and 8.9% the following year. It should take less than three years for Prosperity to earn back an expected 4.3% dilution to its tangible book value. 

Lone Star and First Bancshares were advised by Stephens and Fenimore Kay Harrison. Bracewell advised Prosperity.

Evolve Bank resolves discriminatory mortgage pricing claims

Evolve Bank & Trust in Memphis, Tenn., will pay about $1.3 million to settle claims it engaged in lending discrimination on the basis of race, sex and national origin with mortgage pricing from 2014 to 2019. 

The Justice Department said in a press release Thursday that the $1.3 billion-asset bank will establish a $1.3 million settlement fund and pay a $50,000 civil penalty. 

“This settlement will provide deserved relief to thousands of borrowers who suffered discrimination due to Evolve Bank’s pricing policies,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said in the release. 

“This case marks the Justice Department’s latest step to protect Americans from illegal lending practices, and shows that we will hold lenders accountable for the effects of their discriminatory practices,” Clarke added. 

The Justice Department, which opened an investigation after the Fed referred the matter, alleged that Evolve violated the Fair Housing Act and the Equal Credit Opportunity Act. 

The DoJ claimed the bank’s loan pricing practices resulted in black, Hispanic and female borrowers paying more in the “discretionary pricing” components of mortgage than white or male borrowers for reasons unrelated to creditworthiness.

Since being notified of the investigation, Evolve has revised its policies and practices, the release said. During the four-year term of a proposed consent order, Evolve will maintain policies to reduce loan officer discretion, employ a fair lending officer to work with the bank’s leadership and provide fair lending training to its personnel.

M&T Bank to sell insurance agency

M&T Bank in Buffalo, N.Y., has agreed to sell its insurance agency to Arthur J. Gallagher. 

The $204 billion-asset bank said in a press release that it will sell M&T Insurance Agency in a deal that is expected to close in the fourth quarter. The price wasn’t disclosed. 

The insurance agency specializes in property and casualty products, customized group benefits and surety solutions in the Northeast and Mid-Atlantic. Current leadership and direct employees of the agency are expected to join Gallagher. 

“When we started to discuss the possibility of this transaction with Gallagher, it became immediately clear that this was the optimal company for both our customers and our employees,” Jennifer Warren, head of M&T’s institutional client services business, said in the release. 

"Our goal was to create a seamless transaction with a world-class company that stresses excellence in everything they do,” Warren added. “We found that with Gallagher.” 

Piper Sandler and Hodgson Russ advised M&T.