ABA Banking Journal - November/December 2017 - 32

FEATURE > BANK CONSOLIDATION

Knowing the owners were looking to sell quickly,
VanFosson-a former bank examiner who had been working
as a loan officer at Citizens for 14 years-sprang into action
over the holidays. He quietly began reaching out to potential
investors to ask if they would consider joining him in an
effort to buy the bank. In the end, an initial group of 42
individuals came together to form a new holding company,
Wildcat Bancshares.
VanFosson notes with pride that nearly all the investors were
local members of the Rogersville community, and many
were longtime customers of the bank. And that sense of
local ownership was the key selling point.
"When we started soliciting shareholders, people wanted to
see that sign stay out front-there was pride in that sign,"
he says. "I sold that to the community, I sold that to the
shareholders: we're going to stay local, we're going to stay
independent. That's a selling point that really resonates
with people."
When seeking investments from potential shareholders,
"we didn't ask for a whole lot," he adds. "We had people
that invested as little as $25,000 and we had people that
invested as much as $600,000."
One of the decisions VanFosson made early on was to limit
each individual investor to owning 10 percent or less of the
company's total shares. "We wanted to make sure that it was
truly a community bank with no control by any one person
or any one family."
It was an idea he developed after watching another local
bank that was forced to sell after three majority shareholders
passed away within 18 months of one another. "They had
a really strict buy-sell agreement that the shares could not
be passed on to other family members or siblings-they
had to be sold back to the holding company," he explains.
From that experience, he says, "I learned that you don't
need to be quite as restrictive when you set up your buy-sell
agreements. You keep control to a certain extent, but you
don't want to limit yourself to the point that you force the
sale of the bank unnecessarily."

of it," he recalls. But VanFosson believed in the viability
of the bank and in the support he had from the local
group of investors backing him, and pushed forward with
the transaction.
The sale was completed in August of 2013, with VanFosson
taking over as the bank's new president. His wife, Elaine-
who is also a former bank examiner-heads up the bank's
operations department. "It's tough," he admits. "We've run
thin and we run hard. We do show an ability to make profits,
and we certainly show a viability for the size of a bank that
we are."
Under VanFosson's leadership, the bank has seen returns
on assets of between 1 and 1.3 percent, which he credits
to careful monitoring of operational expenses, growth in
the bank's loan portfolio (which has exceeded 70 percent
since the new ownership group took over), and the
income generated from the bank's $47 million mortgage
servicing operation.
"I believe in the old-school way of banking," he says. "I
believe if you take care of customers, make good loans,
compete hard for deposits, reinvest in the community, that it's
still possible to go out and have a profitable bank. That's my
philosophy, and it's worked well. Our shareholders are happy."
While the circumstances around the sale of two community
banks are never identical, VanFosson believes that his
holding company model can be easily replicated in other
communities if bankers are willing to invest the time and lay
the groundwork. "You have to have the right people in place,
the consultants and the attorneys." But at the heart of it, he
adds, it's all about having strong relationships with members
of the community-and that's something community
bankers already do exceptionally well.
"There's thousands of bankers out there like me that have
those relationships-they just need to tap into that," he
says. "They need to be willing to pursue it, and have a story
to tell."

An alliance of equals

VanFosson created a three-phase process for the selling of
bank stock that gives the holding company the first right of
refusal to purchase. If the holding company chooses not to
buy back the stock, existing individual shareholders have
the option to buy before it is offered up to outside investors.

With a population of 1.3 million, the state of Maine has just
over 30 banks and nearly 60 credit unions, which can make
organic growth opportunities few and far between. And for
the 20-or-so Maine mutuals that rely on retained earnings
as a source of capital, rising costs and limited growth
opportunities isn't exactly a recipe for long-term success.

When he finally approached Nancy Ruyle about purchasing
the bank, she was skeptical. "She tried to talk me out

"If you talk to the directors of any of those mutuals, they're
going to agree on two things. One is that there will be fewer

32

ABA BANKING JOURNAL | NOVEMBER/DECEMBER 2017



Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2017

Chairman’s View
Upfront
Legal Briefs
Economic Outlook
Power Up Profile
Pitching In
Choices and Options Down on the Farm
Eager or Not, Every Board Needs an M&A Strategy
Adapting to Survive
More Than Just a Drink
Operations
Payments
Small Business Lending
Human Resources
ABA Compliance Center Inbox
From the States
Corporate Social Responsibility
Index of Advertisers
From the Vault
ABA Banking Journal - November/December 2017 - Intro
ABA Banking Journal - November/December 2017 - ebelly1
ABA Banking Journal - November/December 2017 - ebelly2
ABA Banking Journal - November/December 2017 - cover1
ABA Banking Journal - November/December 2017 - cover2
ABA Banking Journal - November/December 2017 - 3
ABA Banking Journal - November/December 2017 - 4
ABA Banking Journal - November/December 2017 - 5
ABA Banking Journal - November/December 2017 - 6
ABA Banking Journal - November/December 2017 - 7
ABA Banking Journal - November/December 2017 - Chairman’s View
ABA Banking Journal - November/December 2017 - 9
ABA Banking Journal - November/December 2017 - Upfront
ABA Banking Journal - November/December 2017 - 11
ABA Banking Journal - November/December 2017 - 12
ABA Banking Journal - November/December 2017 - 13
ABA Banking Journal - November/December 2017 - 14
ABA Banking Journal - November/December 2017 - 15
ABA Banking Journal - November/December 2017 - Legal Briefs
ABA Banking Journal - November/December 2017 - 17
ABA Banking Journal - November/December 2017 - Economic Outlook
ABA Banking Journal - November/December 2017 - Power Up Profile
ABA Banking Journal - November/December 2017 - Pitching In
ABA Banking Journal - November/December 2017 - 21
ABA Banking Journal - November/December 2017 - 22
ABA Banking Journal - November/December 2017 - 23
ABA Banking Journal - November/December 2017 - 24
ABA Banking Journal - November/December 2017 - 25
ABA Banking Journal - November/December 2017 - Choices and Options Down on the Farm
ABA Banking Journal - November/December 2017 - 27
ABA Banking Journal - November/December 2017 - Eager or Not, Every Board Needs an M&A Strategy
ABA Banking Journal - November/December 2017 - 29
ABA Banking Journal - November/December 2017 - Adapting to Survive
ABA Banking Journal - November/December 2017 - 31
ABA Banking Journal - November/December 2017 - 32
ABA Banking Journal - November/December 2017 - 33
ABA Banking Journal - November/December 2017 - More Than Just a Drink
ABA Banking Journal - November/December 2017 - 35
ABA Banking Journal - November/December 2017 - Operations
ABA Banking Journal - November/December 2017 - 37
ABA Banking Journal - November/December 2017 - Payments
ABA Banking Journal - November/December 2017 - 39
ABA Banking Journal - November/December 2017 - Small Business Lending
ABA Banking Journal - November/December 2017 - 41
ABA Banking Journal - November/December 2017 - Human Resources
ABA Banking Journal - November/December 2017 - 43
ABA Banking Journal - November/December 2017 - 44
ABA Banking Journal - November/December 2017 - ABA Compliance Center Inbox
ABA Banking Journal - November/December 2017 - From the States
ABA Banking Journal - November/December 2017 - 47
ABA Banking Journal - November/December 2017 - Corporate Social Responsibility
ABA Banking Journal - November/December 2017 - Index of Advertisers
ABA Banking Journal - November/December 2017 - From the Vault
ABA Banking Journal - November/December 2017 - cover3
ABA Banking Journal - November/December 2017 - cover4
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