Key insight: Oklahoma City-based Bank7 has emerged as the winning bidder in the bankruptcy sale of a majority stake in New Mexico-based Century Financial Services Corp.
Supporting data: The net cash purchase price of $89 million was up from the Oklahoma bank's earlier $68 million offer.
Forward look: Bank7 said it expects the transaction to close in the fourth quarter.
In the latest twist in a bankruptcy saga involving numerous small banks, an Oklahoma lender said it's been named the successful bidder to acquire a controlling stake in a New Mexico lender.
Earlier this year, Oklahoma City-based Bank7 Corp.
But Bank7 said Thursday that it prevailed with its latest offer, which has a net cash purchase price of $89 million. That was up from the stalking-horse offer of $68 million.
Bank7 President and CEO Thomas Travis did not immediately return a call seeking comment on Friday. But the bank said in a press release that it expects to complete its acquisition of a controlling stake in Century during the fourth quarter, pending regulatory approvals.
"We are looking forward to completing this transaction and working closely with the employees, customers and communities served by Century," Travis said in the release.
Nathan Race, an analyst at Piper Sandler, said in a note to clients that Bank7 executives have indicated the company is well-positioned to buy the remaining 29% stake in Century.
On Bank7's latest earnings call in July, Travis
"We're not adversarial people. We're not bottom-feeder people. We've had plenty of transactions in our history where we deal fairly and professionally with people," Travis said on the July 16 call.
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Century is the parent company of the $1.36 billion-asset Century Bank. It has nine branches in New Mexico and two loan production offices in Texas, according to Bank7.
Century became mired in a bankruptcy dispute because its majority shareholder, Gerald Peters, used his stake in the bank as the collateral on loans that later went into default.
The lender on some of those defaulted loans, KS State Bank of Kansas, went to court in an effort to be made whole, which kicked off a process that led to the acceptance of Bank7's offer.
Peters is reportedly an art dealer and real estate mogul who borrowed millions of dollars from various banks and credit unions before defaulting and becoming enmeshed in fights with creditors. Those disputes included situations where art by Pablo Picasso and Andrew Wyeth was used as collateral, according to the Santa Fe New Mexican.
The list of banks that lent money to Peters included New Mexico Bank & Trust, which was later acquired by HTLF Bank. HTLF was in turn later sold to UMB Financial.
Bank7 Corp., parent company of the $1.9-billion assets Bank 7, will nearly double in size if the acquisition crosses the finish line. It said Thursday that the combined company would have approximately $3.4 billion of assets.
Bank7 has said that the New Mexico expansion, which would focus on the Santa Fe market, is contiguous to its existing footprint in Oklahoma, Texas and Kansas. It has also said that it plans to retain the Century brand.
