Oklahoma-based MidFirst Bank expanded its presence in the East Valley over the weekend with the acquisitions of Community Bank of Arizona and Union Bank in Gilbert.
On Friday, both banks were declared insolvent, and the Federal Deposit Insurance Corp. was assigned as receiver for each failed institution. The FDIC agreed to sell both banks' assets to MidFirst, and all local offices reopened Monday as MidFirst branches, including Union Bank's sole location at Val Vista Drive and Baseline Road.
Because Community Bank of Arizona is state-chartered, the Arizona Department of Financial Institutions sought to have the FDIC appointed as the bank's receiver because its condition was "unsafe and unsound," said spokesman Jack Hudock. It had been coordinating the examination and supervision of the bank with the FDIC.
Union Bank is a nationally chartered bank.
"MidFirst is a sound organization, and they already had a business presence in Arizona, and so now they have even more locations," Hudock said.
FDIC spokesman David Barr couldn't be reached for comment.
Prior to the acquisitions, MidFirst had 13 Valley locations, including four in the East Valley. Three of the acquired banks' branches are in the East Valley, said Mike Piazza, local MidFirst spokesman.
"With the addition of Community Bank of Arizona and Union Bank, MidFirst will offer a network of over 20 banking centers to our Valley customers," he said.
In addition, MidFirst has three East Valley branches under construction that will open next month, Piazza said.
"MidFirst Bank has a growing network of banking centers in the Valley," he said. "The locations for the two banks complement MidFirst's current network nicely and add additional convenience for our new and existing MidFirst Bank customers."
As of June 30, Community Bank of Arizona had $158.5 million in assets and $143.8 million in deposits. MidFirst assumed all of the deposits and agreed to purchase $125.5 million in assets. The FDIC will retain the remaining assets for later disposition.
As of June 12, Union Bank had $124 million in assets and $112 million in deposits. MidFirst assumed all of the deposits and agreed to purchase $11 million in assets. The FDIC will retain the remaining assets for later disposition.
MidFirst will purchase all deposits except about $88 million in brokered deposits held by Union Bank, National Association. The FDIC will pay the brokers directly for the amount of their funds.
"The assets of Community Bank of Arizona that MidFirst acquired were primarily cash, securities and loans," Piazza said. "The assets included in the Union Bank transaction primarily consist of cash and securities. MidFirst did not acquire the loans of Union Bank, nor did MidFirst acquire all of the Community Bank of Arizona loans."
MidFirst Bank wants Community Bank of Arizona and Union Bank's former customers to know that they are "joining a financially strong bank with a bright future," Jeff Lowe, MidFirst Bank's Arizona market president, said in a statement.
"Customers may now take advantage of MidFirst's extended hours, including evening hours until 7 p.m. during the week, and both Saturday and Sunday hours," Piazza said. "Beginning this week, customers will be able to enjoy free ATM transactions at any ATM nationwide. As we convert accounts onto our system, customers will benefit from the convenience of our growing number of banking centers across the Valley."