Providence Bank evolves with Premier acquisition
As construction workers were finishing the interior renovation of the new Providence Bank headquarters in south Columbia, President Brett Burri raised his voice a bit to be heard above a whining power saw.
Bank managers were still buying furniture and cabinets, he said, and using some of the best stuff left by the former tenant at the south end of Forum Boulevard, Merchants & Farmers Bank. The interior was being remodeled extensively, the windows and roof were being replaced and the canopy is being extended to give the building a new look.
But Burri had more important transition decisions to make, considering that his small bank burgeoned overnight when it acquired nine branches of Premier Bank in October.
Providence has hired a consulting company from Arkansas that specializes in bank reorganizations, and is reviewing and rewriting its policies and procedures. The bank started the year with a new leadership team that includes a mix of Providence and Premier executives.
“We’re taking the best attributes of both organizations,” Burri said in an interview last month. “We’ll be able to build a stronger organization than either of the previous organizations independently.”
Providence Bank opened a loan production office in mid-2007 after acquiring the Bank of Lincoln County, headquartered Elsberry, Mo. Providence opened for full-service business at the end of 2008, with the main bank building on Fifth Street in Columbia, and bought the building on Forum Boulevard last summer. By that time Providence had about 10 employees and $134 million in deposits, including $38 million in the Columbia market, and in the past three years has lent about $150 million.
As Providence was growing, Premier Bank was struggling to survive the financial crisis after losing $32 million in 2008 and $58 million in 2009. First State Community Bank bought Premier’s Columbia operations last July, and Providence made a bid for the rest of the bank as the Missouri Division of Finance and the Federal Deposit Insurance Corp. were working on Premier’s exit strategy. Premier had nearly $1.2 billion in assets and $1 billion in deposits, but it also too many non-performing loans and became the 132nd FDIC-insured institution at that point in 2010.
On Friday, Oct. 15, minutes after the close of business, the FDIC declared Premier Bank insolvent and announced that Providence Bank would take over all nine of Premier’s remaining branches and assume all of the deposits, with some exceptions.
Burri had said at the beginning of 2010 that the bank was planning to expand, and at the end of the year he said that Premier “seemed to be a good fit for us. They have a good branch network” and advantageous locations.
The deal was struck earlier in the week but kept private. Providence agreed to purchase $658 million of the bank’s assets and entered into a loss-share transaction with the FDIC on $409 million of Premier’s assets, according to an agency news release.
Burri said he went to Premier’s main bank in Jefferson City and had pizzas delivered to the branches. They had a long night ahead because all of the arrangements had to be made in time for the bank branches to reopen seamlessly the next morning.
Burri had arranged for a videoconference to be shown simultaneously in each of the branches in which he introduced himself and other Providence executives and explained how the transition was going to work.
Burri said Providence planned to “grow our branches. … For two and a half years, they had been playing defense, and I told them, ‘It’s time to play offense and look for opportunities to get back into the banking business.”’ Premier employees “asked some tough questions” but felt, in a way, that the transfer “lifted a cloud hanging over their heads.” Burri said he was counting on them to make the transition successful.
Only a short time had passed since they had heard the news about their bank’s failure, but “everyone felt reassured,” Burri said. “After about 30 minutes, we emerged from a very emotional meeting.”
Signs and logos were changed, down to the envelopes at the teller stations, and the Premier website was redirected to a Providence site that explained what was happening.
Burri, who didn’t get back home in Columbia until about midnight, said he was impressed by the attitude of employees from both banks. “What I saw that night has carried through this entire transition.”
Providence Bank’s Leadership
• Wes Parks, chief lending officer in Columbia.
• Jen Megee of Providence in Columbia and Arlene Vogel from Premier in Jefferson City will direct retail banking.