Santa Fe, New Mexico-based Century Bank said Friday that it was “not involved” in the proposed sale of its shares to Oklahoma City-based Bank7, announced the previous day.
Bank7 said Thursday that it would buy a controlling interest – 71% – in Century Bank, for $68 million.
But Bank7 said it’s going to purchase the shares in a court-ordered sale, and that it’s technically a “stalking horse” bidder.
Century’s majority shareholders, Gerald and Kathleen Peters, own roughly 44% of the bank, but they defaulted on $37 million in loans from another bank. Their stake in Century, and a related shareholder’s 27% stake, were collateral, according to court documents.
Bank7 expressed interest in purchasing the Peters’ shares, and a court-appointed receiver approved the deal. But Century said Friday that the transaction remains subject to competing bids, court approval, required regulatory approvals, and other closing conditions.
“Accordingly, there can be no assurance that the transaction … will be completed on the terms announced by Bank7, within the anticipated timeframe, or at all,” the bank said.
Century Bank CEO and President John Brichetto said it’s “business as usual at Century Bank,” and that the shareholder matters “do not affect accounts, deposits, or the quality of service” at the bank. The $1.35 billion-asset bank is well-capitalized, he added.
“This is a private matter between Bank7 and individual shareholders,” a spokesperson for Century Bank told Albuquerque Business First.
Bank7 acknowledged there’s “no assurance” that the transaction will happen. But if it does, it’ll close in the third quarter to create a Southwest banking organization with roughly $3.4 billion in assets.
“This transaction extends our footprint into a neighboring Southwest market, represents a disciplined use of our excess capital, and positions the combined organization to deliver personalized, high-touch service to even more business owners and entrepreneurs – all to the benefit of our customers, communities, and shareholders,” Bank7 President and CEO Thomas Travis said in a prepared statement Thursday.
Piper Sandler analyst Nathan Race told American Banker the purchase is “a very compelling opportunity” for Bank7 “at a pretty attractive price.”
Century’s $1.2 billion in low-cost deposits “provides – theoretically, if this deal gets closed – significant dry powder in terms of core deposit funding to support Bank7's proven commercial loan growth prospects,” Race said.
