Corporate Matters

Urban Partnership Bank, Chicago, a de novo launched by taking hold of the failed Chicago-based ShoreBank's assets, continues to shift around its branch locations in an effort to become more efficient and accessible. The latest move has happened in Detroit, where UPB has closed an over-sized, out-of-the-way loan production office and opened a full-service branch on the campus of Wayne State University.. This Detroit move is a model for what were once ShoreBank's less-productive locations, said Brian Berg, vice president and director of corporate communications. "It was just a big lending office in a large space that was shared with a non-profit," Berg said. "Now the new location is in the heart of Detroit, where there are students and art museums and hospitals. Our customers are concentrated.". Berg said UPB is making a number of changes across its locations in Chicago, Detroit, and Cleveland, including small details geared toward making life easier for retail customers. The over-arching concept of these changes is referred to by the bank as "micro-branches." The new campus branch, for instance, will reside in a 3,000-square-foot space among a mixed-use component of student housing.. "The [Wayne State] branch will have a night deposit box. That might seem obvious, but that's because it is. The old location didn't even have that," Berg said. "Not having a night deposit is like a library not having a book drop.". The campus branch is the third micro-branch the bank has launched thus far. The first two were opened earlier this year in Chicago. Both are located on the first-floor of store-fronts along heavily trafficked thoroughfares. They are highly visible to commuters and pedestrians, and are near public transportation that serves Chicago's South and West Side communities, where the bank already has or is building a presence.. "We want to reach consumers where they work and live," Berg said. "Some of the old branches in places were hard to get to. They were tucked into neighborhoods and not visible. We think this placement approach is more inviting to existing customers, but the under-banked as well. Consumers without a banking relationship are intimidated by the Federal style architecture of the past. The micro branches are far more casual and comfortable.". The $1.4 billion UPB was formed in August, 2010 with $145 million in capital raised initially to save ShoreBank. The success of that effort relied on an additional $75 million in TARP funding, which never came. ShoreBank was then closed, and so the investment group gained a charter and purchased the bank from the FDIC. "We're the only scenario I know of during this recession where a de novo bank sort of arose out of the ashes of a failed bank," Berg said. "Sort of like a phoenix." . Two exemplary banks join forces in Iowa. When the time came to retire for Fred Hagemann, owner and president of State Bank & Trust, Waverly, Iowa, he found an eager merger partner in Security State Bank, New Hampton, Iowa. Security has now completed an acquisition of State Bank, bringing its assets size to $325 million.. It was a great buying opportunity for State Bank, said its president, John Rigler. "It was a CAMELS-1 rated bank," he said. "It didn't have any of the loan or credit problems a lot of banks are dealing with right now. Our bank has avoided a lot of those same economic difficulties, and this merger strengthens both banks even more. Our increased market size takes us from three counties and four communities to six counties and eight communities.". A bonus from the outset was that both banks already were relying on the same core system technology, so combining the two was easy. Both banks will also retain their separate identities as well as all employees.. "It really was a perfect fit; seamless," Rigler said. "The change is pretty much invisible to customers. But we did invite Security customers to meet us at each location earlier this year. They get access to more ATMs and more trust and investment services, among other things. And the people who work at the locations that the customers know won't change. Our banks have been staying strong, and we have been lucky to be part of a strong ag sector, but our communities have their trouble areas too, and making known the continued stability of the bank is important." . Minnesota bank acquires sixth failed institution. Immediately following its closure by the Minnesota Department of Commerce in October, The RiverBank, Wyoming, Minn., was purchased from the FDIC by Central Bank, Stillwater, Minn. The six offices of the 114-year-old RiverBank include Wyoming and Chisago City, Minn., as well as four locations in Wisconsin: North Hudson, Osceola and two in St. Croix Falls.. The acquisition brings Central's network of banking offices in the greater Twin Cities area to 21. The bank also has an office in Fort Myers, Fla.. In the last two years, Central Bank has acquired five failed Minnesota institutions from the FDIC, and one in Florida: Mainstreet Bank, Forest Lake; Rosemount National Bank; Jennings State Bank, Spring Grove; Riverview Community Bank, Ostego; and Commerce Bank of Southwest Florida, Fort Myers. Since August, 2009, when Central began acquiring failed banks by purchasing Mainstreet, the bank's asset size has nearly doubled to its current $770 million.