Liberty Bank and Trust and Tri-State Bank to merge

New Orleans bankers plan to buy Tri-State Bank, ending the Memphis-based company’s 75-year tenure as the city’s leading black-owned bank.

Liberty Bank and Trust Co., the country’s third-largest black-owned bank, and Tri-State released a statement Thursday evening disclosing the proposed deal. Tri-state regulators and shareholders must approve the merger for the deal to proceed.

Tri-State, founded in 1946 by insurance executives, distinguished itself as a bank paving the way for black Americans during the period of integration in the 1960s and 1970s, but struggled over the decades. following as a downtown oriented bank.

Tri-State slashed its all-important church loans as middle-class wage gains stagnated, black residents dispersed to parts of the city far from downtown, new bus lines bypassed its location on Main Street and many black families have gone to the bank with larger establishments.

Tri-State said it lost $ 866,000 last year, continuing a trade crisis that led to four management changes between 2021 and 2016 on the heels of $ 4.8 million in losses nearly a decade earlier . In February, famed Memphis banker Mike Edwards, former senior executive at First Tennessee Bank, now First Horizon, was appointed interim chief executive.

Mike Edwards has been appointed interim CEO of Tri-State Bank.  He is pictured on October 15, 2014, while at Paragon Bank.

Memphis-based First Horizon, the state’s largest local bank, injected $ 1.5 million into Tri-State in 2016. The smaller bank also sold its downtown office on Beale and Main streets. at Belz Enterprises and centered on a single branch, located in Whitehaven on Elvis Boulevard Presley. The head office is in a building on Union Avenue in Midtown.

The history of Liberty Bank

Liberty Bank, founded in 1972, managed to grow under the leadership of Alden McDonald, who rose to prominence in banking circles after President Jimmy Carter appointed him in 1980 to a panel dealing with debt issues. nationwide housing.

Liberty grew through acquisitions outside of New Orleans, taking over First American Bank in Jackson, Mississippi, and going as far as Chicago and Detroit. The bank, now seventh-largest in New Orleans in terms of customer deposits nationwide, reported net operating income of $ 1.46 million in the most recent quarter. Ten of its 21 branches are located outside of Louisiana, in states like Alabama and Kansas.

The growth of the New Orleans bank attracted a $ 1.5 million investment in 2016 by IberiaBank of Lafayette, Louisiana. First Horizon and Iberia merged last year. Iberia’s investment in Liberty was followed by bank injections from Wall Street as part of new policies designed to alleviate social inequalities across the country. In February, JPMorgan Chase invested $ 10 million in Liberty. In April, Liberty was among 11 banks chosen by Wells Fargo for $ 50 million in total equity injections.

And after?

The merger of the New Orleans and Memphis banks would create the largest black-owned bank in the country, with deposits exceeding $ 1.3 billion and assets including loans and real estate totaling $ 965 million.

Tri-State’s board of directors has approved the merger. The date of the bank’s shareholder vote on the merger has not been announced. Bank executives on Thursday released statements indicating that the merger could take place by the end of the year. Their statements praise a merger.

In New Orleans, the McDonald’s statement says, “Memphis is extremely rich in history and we are proud to continue to serve the community. Tri-State and our board of directors are used to serving the underbanked, and this merger provides improved financial access, products, banking technology and lending capacity. We are excited and focused on continuing to serve the people of Memphis with an expanded suite of financial services, including a more robust mortgage product and a variety of personal and business banking options. Now is a great time for minority depositories, and we are honored to join the Memphis community! “

Archie Willis III, founder of ComCap Partners in Memphis.

In Memphis, Archie Willis, Director of Real Estate and Investor, President of Tri-State, said in a statement, “Partnering with Liberty, an extremely well-run institution that shares our culture, will enhance our ability to serve our clients. and to respect our mission. This transaction is compelling to all of Tri-State’s stakeholders, including customers, employees, shareholders and our community.

The proposed sale price has not been publicly disclosed. Tri-State employs 22 people in Memphis, up from 74 more than a decade before the financial woes began. In terms of history, she was regarded as a respected leader as the city’s only black-owned bank.

Established in 1946 by nationally recognized insurance executives in Memphis, Joseph E. Walker and Maceo Walker, the bank grew stronger and served black Memphians at a time of increasing American prosperity when service to blacks was limited in white-owned banks, according to the press. accounts.

A. Maceo Walker, president of Universal Life Insurance Co., was one of the founders of Tri-State Bank in 1946.

Last year, a report on the country’s 18 remaining black-owned banks published in the Investopedia publication noted “in the first 10 years after its founding, the Tri-State Bank of Memphis made more than $ 10 million. dollars in first mortgage loans on homes, representing homes owned by more than 2,000 African-American families. Tri-State has also been instrumental in the civil rights movement, including organizing local sit-ins in the bank’s boardroom, providing sureties for protesters and providing $ 60,000 in loans to help save the Lorraine Motel, the site of Dr. Martin Luther King’s assassination, from foreclosure in 1982.

Investopedia’s report, which reviews the history of commercial banks, credit unions, and a type of bank known as savings or savings and loans, highlights the decline of owned financial institutions. to blacks across the country in recent decades:

“Between 1888 and 1934, more than 134 black-owned financial institutions were founded, mostly located in the southern states. Their numbers declined during the Great Depression … leaving nine in 1930.

“It wasn’t until the civil rights movement” in the 1960s, says the report, “that a resurgence took place, bringing their numbers to 50 in 1976. But in 1988, the savings crisis and credit wiped out 35 banks.The most recent decline began in 2001, during the recession of the early 2000s … which accelerated rapidly after the Great Recession. … (in 2008) started. Today, including credit unions, there are 38 black-owned financial institutions left. Together they have about $ 5.135 billion in assets. ”

About Harold Shirley

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