First National Bank of Durango will be sold to Triumph Bancorp Inc. of Dallas for $134.4 million in the third quarter of the year.
In addition, Triumph will purchase Citizens Bank of Pagosa Springs for $13 million, with the deal also closing in the third quarter.
“We wouldn’t do a deal with someone who didn’t share our values, especially our focus on the importance of customers and community,” said Mark Daigle, president and CEO of First National. “TBK has made clear they are committed to community banking and the customers, and that has been seen with their other acquisitions.”
While First National Bank of Durango and Citizens Bank are separate businesses, held by separate bank holding corporations, the Fitzgerald family, who reside in Chicago and Durango, are the principal owners of both banks. Both deals were announced this week.
When acquisitions are finalized, some duplication of positions is unavoidable, and Daigle said some layoffs will occur. However, he said TBK is committed to looking at employees’ skills and talents and what they could add to the firm going forward, and not simply eliminate positions based solely on duplication of functions.
“Hopefully, that will minimize some of that impact,” he said. Daigle could not yet detail the number of positions that could be lost when TBK takes over operations, likely in October. He said new opportunities for career enhancement would open for employees as part of the bigger TBK operation.
Daigle said one advantage of being acquired by a bigger entity is that benefit packages offered by TBK are more advantageous to employees given the scale of TBK’s operation.
He said lower health benefit costs paid by employees at TBK would become available to current First National Bank employees based on a better insurance package TBK has been able to negotiate based on its size. He also said TBK has a charitable contribution matching program that matches employees’ charitable donations, a benefit that is currently beyond the capability of First National.
First National Bank has 100 employees in La Plata County, and its 2017 payroll was $5.97 million, Daigle said.
TBK has $3.5 billion in assets compared with $646 million for First Bancorp of Durango, First National Bank’s holding company. First National Bank has about $500 million in total assets. The remainder of First Bancorp assets comes from its subsidiary, Bank of New Mexico, which serves clients in Albuquerque, Gallup and Grants, and those banks also will be renamed under the TBK moniker.
Citizen’s Bank, held by Southern Colorado Corp., has $88 million in total assets.
Another emotionally painful aspect of the sale, Daigle said, is a name change that will replace a venerable Durango business name with a new name, TBK Bank.
TBK Bank has 53 branches and operates in Texas, Kansas, Iowa, Illinois and Colorado. With the acquisition of First Bancorp of Durango, it will also enter New Mexico.
TBK is traded on the Nasdaq composite under the ticker symbol TBK. TBK was trading at $38.70 midday Tuesday, down 60 cents from its closing price Monday.
Besides its main office, First National Bank of Durango has a branch in Bodo Industrial Park and in-store branches at Albertson’s and Walmart, and one branch in Bayfield. No closures are expected, Daigle said.
First National was the first bank to open in Durango in 1882.
Steve Short, chairman of First National Bank’s board of directors, said the Fitzgeralds were not actively seeking to sell the bank but were approached by TBK about a potential sale.
Upon close of the sale, both Daigle and Short are expected to join TBK’s board of directors, a move Daigle said shows TBK’s commitment to Southwest Colorado.
Several new products are expected to be added, Daigle said, given TBK’s greater resources. Those additions are expected to include new commercial loan opportunities, more access to technological innovations and use of more ATMs.
In addition, greater capital reserves of TBK will allow the new owners to increase the total amount of any single commercial loan the bank can make from its current cap of $6.5 million to be in excess of $80 million, Daigle said.
“It will dramatically increase our ability to respond to local lending needs,” he said.