In a significant development in a bankruptcy case that has drawn attention across the banking sector, an Oklahoma-based lender has emerged as the winning bidder for a controlling stake in a New Mexico financial institution.
Bank7 Corp., headquartered in Oklahoma City, announced Thursday that it has been selected as the successful bidder for a 71% stake in Century Financial Services Corp., based in Santa Fe, New Mexico. The net cash purchase price is set at $89 million, a substantial increase from the earlier stalking-horse offer of $68 million.
Background of the Bidding Process
Earlier this year, Bank7 had been named the “stalking-horse bidder” for the majority stake in Century, a designation that set a baseline bid but left room for other potential buyers to enter the fray. The competitive bidding process ultimately concluded with Bank7 prevailing, as confirmed in a press release.
The transaction is expected to close in the fourth quarter, subject to regulatory approvals. Bank7 President and CEO Thomas Travis expressed optimism about the deal, stating, “We are looking forward to completing this transaction and working closely with the employees, customers and communities served by Century.”
Financial Details and Analyst Insights
The $89 million net cash purchase price marks a notable escalation from the initial $68 million offer. Nathan Race, an analyst at Piper Sandler, noted in a client memo that Bank7 executives have indicated the company is well positioned to acquire the remaining 29% stake in Century.
During Bank7’s earnings call in July, Travis addressed the potential buyout of minority shareholders, saying, “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.”
Century Financial Services and Its Subsidiary
Century Financial Services Corp. is the parent company of Century Bank, which boasts $1.36 billion in assets. The bank operates nine branches across New Mexico and maintains two loan production offices in Texas, according to Bank7.
Origins of the Bankruptcy Dispute
The bankruptcy proceedings stem from actions by Gerald Peters, Century’s majority shareholder, who used his stake in the bank as collateral for loans that subsequently defaulted. One of the lenders, KS State Bank of Kansas, pursued legal action to recover its funds, initiating a process that culminated in the acceptance of Bank7’s offer.
Peters, described as an art dealer and real estate mogul, reportedly borrowed millions from various financial institutions before defaulting and becoming entangled in creditor disputes. These conflicts even involved art by Pablo Picasso and Andrew Wyeth used as collateral, as reported by the Santa Fe New Mexican.
Impact on Bank7's Footprint
Bank7 Corp., which operates Bank 7 with $1.9 billion in assets, stands to nearly double in size upon completion of the acquisition. The combined entity would have approximately $3.4 billion in assets.
The expansion into New Mexico, particularly the Santa Fe market, is seen as a strategic fit, as it is contiguous to Bank7’s existing operations in Oklahoma, Texas, and Kansas. The company has also indicated plans to retain the Century brand.
