News
There has been a recent surge in sales of larger community development banks. Last year, 34 banks with $1 - $10 billion in assets agreed to be sold, a 26% increase from 2016 and an over-50% increase from 2011. These deals hint at potential future mergers among bigger institutions, though disagreements over pricing can often delay or derail some deals. According to data from the FDIC the average bank is also getting bigger. Banks may find it challenging to grow organically, said Vincent Hui, who leads the M&A and risk management practices at Cornerstone Advisers.
New York-based Carver Federal Savings Bank, the last remaining black-owned bank in the City, the turns 70 this year. To commemorate the anniversary, President and CEO Michael Pugh was recently interviewed live on Nasdaq Spotlight to highlight the achievements of the institution. "We know it's important to be able to support low-to-moderate income communities. One example of how we do it at Carver is... financial education. We have a laser focus on this particular pillar as a critical part of our business model," said Pugh. "Over the past nine years, we have educated more than 15,000 people through financial education programs." Pugh also talked about the bank's recent sale of its Harlem headquarters and impending relocation to the top floor of a nearby building on East 125th Street.
First Independence Bank, a black-owned bank headquartered in Detroit, is gaining a new CEO: Kenneth Kelly, a former Birmingham executive with experience at Alabama Power Co. and Hands-On Birmingham. Kelly will be responsible for leading the bank's local financial operations and overseeing its management infrastructure. "As chairman and CEO, Kenneth brings deep and experienced business leadership to First Independence Bank," said Linda Forte, board member and chairwoman of the human resources committee. "His knowledge, relationships, and expertise will be extremely valuable in leading the bank's growth opportunities in Detroit." Kelly was recognized in the Birmingham Business Journal's 2001 Top 40 Under 40 Class, and has been awarded the United Way Mervyn Stern Award for his leadership contributions in metro Birmingham.
BankFirst Financial Services in Mississippi has acquired HomeFirst, a mortgage services company in Oxford, Mississippi. The $958 million-asset BankFirst said in a press release that it will retain all of HomeFirst's employees, and will complete the transfer to HomeFirst's customer accounts to BankFirst this month. The bank did not disclose the financial terms of the purchase. "The addition of the HomeFirst team complements and enhances our current mortgage platrorm and establishes a new presence for us in the Oxford community," said Moak Griffin, BankFirst's president and CEO. "We are proud of our 130-year history and we remain committed to helping our customers and communities thrive."
The Senate has recently passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which would roll back financial regulations instituted after the recession. If passed by the House and signed by the President, the Act would reduce the money and resources smaller lenders currently spend on compliance. Savannah Now spoke with Robert James II, President of Carver State Bank, on the impact such legislation would have on CDFI banks. "It really makes sense for smaller banks," said James. "We serve the distressed community, the poorest in Savannah. We make church loans, the mortgages, the loans other banks won't." He said the biggest impact of this legislation on banks like Carter would be the change in how large deposits are treated.
The CDFI Fund has released its annual report: the 2017 Year in Review. The 60-page report includes the achievements of the CDFI Programs in 2017, as well as key impact data from the history of the Fund. In 2017, the CDFI Fund awarded organizations more than $472 million in financial assistance, loans, and bond guarantees. The CDFI Fund alwo awarded $7 billion in New Markets Tax Credits (NMTCs), the largest single award round in the history of the program.
Last week, the CDFI Fund awarded 40 organizations $120 million in Capital Magnet Fund Awards for the development of affordable housing and related economic development activities in low-income communities. Five CDBA member banks received CMF Awards: BankPlus in Ridgeland, MS: $700,000; MS; Beneficial State Bank in Oakland, CA: $3 MM; Legacy Bank and Trust in Rogersville, MO: $2.4 MM; United Bank of Alabama in Atmore, AL: $4 MM; and Virginia Community Capital in Christiansburg, VA: $4MM. In total, 7 CDFI banks and 2 CDFI bank holding companies applied, with 55% receiving awards. Congratulations to the winners!
Sunrise Banks CEO David Reiling has been named by Trust Across America as a 2018 Lifetime Achievement Award Honoree. Reiling is joined by seven other Lifetime Achievement Honorees this year and is the first CEO in the financial industry to receive this award. Honorees stand out as individuals who have been named a Top Thought Leader 5 times and continue to instill the values, principles, and beliefs essential to building a foundation of trust. "I am humbled to be recognized by Trust for a lifetime of achievement and it is an honor to be recognized among such great leaders," said Reiling. "Trust is a two-way street. Leaders must earn the trust of the people that support them. In turn, people must trust their leader and share their vision and drive for success. Shared trust is what makes positive change possible."
South Carolina Community Bank, plagued by problematic commercial real estate loans and other struggles since the economic crisis of 2008, has witnessed progress in recent months. New president and CEO Dominik Mjartan, in his fourth month at the helm of South Carolina Community Bank, said that it has raised more than $11 million in new deposits and closed more than $3 million in new loans to small businesses, nonprofits, and individuals. "We've cleaned up," said Mjartan. "I believe, and this bank will prove it, that margin and mission are mutually reinforcing." Mjartan elaborated on avoiding future turmoil through diversification and finding niche opportunities for investment.
Urban Partnership Bank in Chicago is considering selling itself. The $484 million-asset bank is seeking to determine possible interest from buyers. David Vitale, Urban Partnership's chairman, said that the bank, which has shrunk over the past seven years, would benefit from being part of a better capitalized entity. Urban Partnership, designated as a minority bank, was formed in 2010 to buy the failed ShoreBank. Vitale said that Urban Partnership could also stay independent, with a decision likely this spring.