Pilgrim Bank set to acquire Community Bank
Local lender's assets had grown to $31 million in three years since opening
By BRUCE ALSOBROOK | News-Telegram Managing Editor
Aug 28, 2007 - The holding company for Pilgrim Bank in Pittsburg has entered into an agreement to acquire the parent company of Community Bank in Sulphur Springs.
NETEX Bancorporation is to acquire all of the common stock and warrants of City Bancorp, Community Bank's parent company, for cash. NETEX will also acquire Community Bank's offices in Wellington and Clarendon under the the terms of the deal, announced Monday afternoon.
The transaction has been approved by the board of directors of both NETEX and City Bancorp but is still subject to customary conditions, including the approval of the shareholders of City Bancorp as well as bank regulatory authorities.
"This acquisition will expand our presence into Sulphur Springs in East Texas and Clarendon and Wellington in the Texas Panhandle," stated Ken Pilgrim, chairman of the board for Pilgrim Bank and NETEX. "We expect that their expertise and knowledge of their respective markets will enhance our franchise."
David Brewer, president of Community Bank in Sulphur Springs, was out of the office today and could not be reached for comment.
Pilgrim Bank currently has three banking offices — one in Pittsburg and two in Mount Pleasant. As of June 30, Pilgrim Bank's assets totaled $207.6 million. The acquisition of Community Bank is expected to boost Pilgrim's assets to $283.9 million.
Pilgrim Bank was originally chartered as First Guaranty State Bank in 1911. The bank changed ownership in 1969 with Lonnie "Bo" Pilgrim becoming chairman of the board. NETEX Bancorporation, a one-bank holding company, was established in 1993 to take ownership of First State Bank, with 100 shareholders of the holding company and Bo Pilgrim the principal shareholder. The name was changed from First State Bank to Pilgrim Bank in March 1997.
Community Bank, based in Wellington in the Texas Panhandle, was founded in 1910. In 2004, Community Bank expanded into Northeast Texas, opening a branch in Sulphur Springs.
Don Donaldson, president and chief executive officer of Community Bank, announced in July 2003 the plans to build a new branch in Sulphur Springs, citing business connections and the growth potential of the area as reasons to build the $1.5 million facility. The bank, located at 1404 South Broadway Street, opened in February of 2004.
While starting small, the bank had definite community ties. About 25 percent of the bank's investors were from Sulphur Springs, and the bank's first six employees had more than 100 years of combined banking experience, most of it accumulated in Hopkins County.
In just three years, Community Bank grew to hire 17 employees and totaled $31 million in assets. In January of this year, Community Bank expanded, opening a mortgage office at 1067 Gilmer Street to handle the growth in real estate loans.
At this year's Hopkins County Chamber of Commerce banquet, the Small Business of the Year award was presented to Community Bank, which was noted for its extensive involvement in community projects since its inception in 2003. That same night, the Industry of the Year award went to M Hanna Construction, headed by Matthew Hanna, one of Community Bank's original directors in Sulphur Springs.
Hanna, along with Donaldson and another person to be named later, will become directors of Pilgrim Bank under the terms of the acquisition agreement. The deal is expected to be finalized before the end of the year, with the banks to combine operations in early 2008.