One merger and one partnership occurring just a day apart each will have a substantial impact on the banking landscape in the days to come, one nationally and the other on a community level.
Boston Bank of Commerce has announced a merger that, when completed, will create the first national minority banking platform controlled and managed by blacks. The BBOC will be the surviving entity of the merger with Founders National Bank of Los Angeles.
On a more local scale, a community partnership also unveiled last week will bridge the small divide between two Berkshire County banks.
The combined entity in the stock-for-stock swap merger between BBOC and Founders National will have more than $260 million in assets and serve Boston, Los Angeles and Miami markets, where BBOC recently acquired Peoples Bank of Commerce. The merger was approved by the respective boards of directors and is subject to shareholder and regulatory approval.
“Within the sector of minority banks, this is a watershed event,” said Kevin Cohee, chairman and chief executive officer of BBOC. “We are the only minority bank that operates in multiple marketplaces,” he said.
The merger of BBOC in Boston, Peoples Bank of Commerce in Miami and Founders in Los Angeles would create a national network of community development banks. The combined entity would become the third largest black-owned bank in the country.
“Each board of directors had the vision to understand the importance of combining our management, knowledge, operations and technology to better support minority communities,” said Cohee.
The Founders board of directors will join the BBOC board in the combined entity. Cohee will be joined by Kenneth T. Lombard of Founders as the vice chairman of the combined entity. Lombard is president of Johnson Development Corp. and Magic Johnson Theatres. Jheryl Busby, chairman of Founders National Bank of LA will also be joining the BBOC board along with three other Founders directors. Busby is currently the head of Urban Music at Dream Works SKG.
“We believe the combination of Founders, BBOC and Peoples will enable us to better fulfill our mission to serve minority communities,” said Busby. “With the merger, Founders will continue to have local management serving the local banking needs of Los Angeles, but with the added power of a national franchise. We will be able to expand the services offered to our community through improved technology and greater management resources. This is a win for everyone.”
The city should be proud of the bank’s accomplishment, said Cohee. “You have a Boston-based company that is on the forefront of significant, positive change on a national level,” said Cohee.
BBOC is owned and managed by a husband and wife team, Cohee and Teri Williams, the bank’s executive vice president.
Founders National Bank of Los Angeles is the only black-owned commercial bank in Los Angeles with more than $100 million in assets.
Berkshire Bond
Hoosac Bank of North Adams and Williamstown Savings Bank of Williamstown announced plans last week to combine resources to serve the residents and businesses in their coverage area. Under the plan, each bank would continue to operate independently with its existing name and separate bank charter.
The proposed partnership, which must be approved by state regulators, federal regulators and the corporators of each bank, would create an expanded network of community-based banking, insurance and investment services. Customers would experience little or no visible change, as each bank would retain its current staff, office locations, operating hours and products. Customers would enjoy the added convenience of being able to conduct deposit and loan transactions at any Hoosac Bank or Williamstown Savings Bank location.
“This partnership is all about community,” said Thomas W. Kelly, president and chief executive officer of the $243 million-asset Hoosac. “Together, two strong, well-established community banks – which share a common commitment to Northern Berkshire county – will be even stronger.”
“Our communities are on the move economically,” said Stephen G. Crowe, president and CEO of Williamstown Savings Bank. “It’s going to allow our customers to do banking transactions at additional offices. This offers two more locations for routine banking transactions. Through another subsidiary [TrueNorth], it will allow our customers the ability to purchase mutual funds and annuities.”
According to the proposed partnership, a new mutual holding company, named MountainOne Financial Partners and headquartered in North Adams, would be created to serve as the parent organization for Hoosac Bank, Williamstown Savings Bank, and Hoosac-owned Coakley, Pierpan, Dolan & Collins Insurance Agency and True North Financial Services. Each company would continue to operate as a completely independent business under current management. According to Crowe, customers will not see one change in how the banks run. Over time, the potential would exist for sharing certain administrative functions, including technology, finance, human resources and marketing.
“I think our customers will appreciate this forward-looking approach,” said Kelly.
Hoosac Bank was founded in 1848 and has 49 employees in offices in North Adams and Williamstown. Founded in 1892, Williamstown Savings Bank has $134 million in assets, 34 employees and an office in Williamstown.
