Choice Financial buys Comfrey bank, flips charter

Northwestern Financial Review, Oct 1-Oct 14, 2005 by Dullum, Justin, Bengtson, Tom

Choice Financial Holdings, Inc., of Grafton, N.B., took another step toward expansion when it completed the acquisition of Peoples State Bank of Comfrey on Sept. 15. Choice Financial owns 85 percent of the Minnesota bank, which it converted to a separately-chartered thrift and renamed Choice Financial Savings Bank. It purchased the bank from Carlson Bankshares, Inc., of Comfrey.

Lynn Paulson, president of Choice Financial Holdings, combined four banks and three companies in the last few years to go from a company in 2001 that had $160 million in assets to one today that has $310 million. Additional in-state growth, however, seemed elusive.

"The demographics of our area limited us," Paulson said. "And, given that we were a state charter, there are barriers to the kind of growth we can consider."

About a year ago, Paulson turned his eyes on the $15 million Peoples State Bank of Comfrey. Bob Carlson, the long-time owner of the bank, will remain on the bank's board of directors, but he will turn the presidency over to Ron Winch, who has worked at the bank for 23 years. Carlson continues to own United Minnesota Bank in New London, Minn.

Comfrey is a town of about 365 people in southern Minnesota. The town was flattened by a tornado in March of 1998, leaving the bank the only building in town still standing. Locals rebuilt, and Paulson sees opportunity for growth. He said he expects to add to the bank's current staff of five.

"We bought it with the idea of growing the bank in Comfrey," Paulson said. "We have had a successful business model in North Dakota that I expect will transfer to Comfrey.

"We will upgrade the bank with online banking and other technology that the bank hasn't had," Paulson said.

Given the branching laws applicable in North Dakota and Minnesota, Paulson said it made sense to convert the Comfrey charter to a savings bank. "The Office of Thrift Supervision is a little more progressive with regard to their outlook on branching," Paulson said. "We have found them to be an excellent regulator to work with."

Colorado banking family back in Denver

Collegiate Peaks Bancorp, Inc., a corporation owned by members of the Moore family of Denver, has agreed to acquire Collegiate Peaks Bank from Centennial Bank Holdings, Inc., Denver. The transaction is expected to close late in the fourth quarter.

Collegiate Peaks Bank previously was owned by Guaranty Corporation, which was acquired by Centennial Bank Holdings at the end of 2004. Collegiate Peaks Bancorp is a newly formed holding company owned by descendants of Ron Moore, the former chairman and largest shareholder of Guaranty Corporation at the time of his passing in 2003.

"When the transaction is completed, we will have come full circle," said Charles J. Forster, who along with the Moore family acquired Collegiate Peaks Bank in 1995. Today, Collegiate Peaks is a $97 million institution. "I had a 25-year personal and business association with Mr. Moore, until his passing. It's great to continue the association with the Moore family. We'll continue to operate the bank as we have since 1995 with the focus on providing banking service in a personal way."

In acquiring Guaranty, Centennial's objective was to strengthen its presence along the Colorado Front Range corridor, Forster said. Completion of the strategic plan required only two of Guaranty Corporation's three separate banks. After the consolidation, Centennial concluded that Collegiate Peaks Bank could be sold.

David Boyles, president and chief operating officer of the $2.4 billion Centennial Bank Holdings, stated in a press release, "While Collegiate Peaks Bank is a very sound community bank, it does not fit into Centennial's strategy to build a community banking franchise along the Colorado Front Range."

Indiana merger boosts commercial prospects

Union Community Bancorp, Crawfordsville, Ind., and MainSource Financial Group, Inc., Greensburg, Ind., have announced a merger. Union Federal Savings and Loan Association, a subsidiary of Union Community, will become a new subsidiary of MainSource. The deal awaits Security and Exchange Commission and Union Community shareholder approval. Union Community CEO Alan L. Grimble said he anticipates both.

"The merger benefits [Union Federal Savings] in very tangible ways," said Grimble. "It makes a lot of sense to us and we're very confident our shareholders see these benefits. Given the challenges of being a small public company in today's environment, this merger is an excellent opportunity for our shareholders. We will eventually be able to offer our customers additional products and services, like online banking and bill pay, and specialized services catering to ag customers and small businesses. That's just good business."

Union Federal's six branches in Fountain, Tippecanoe, Montgomery and Warren Counties will become MainSource Bank-Crawfordsville, of which Grimble will be president.

"When you have a chance to boost your level of service by teaming with a bank that shares your philosophy, it's a real opportunity," said Grimble. "It's really going to convert us into a true commercial bank."