Mutual Of Omaha Acquires 2 Failed Banks

Mutual of Omaha’s banking unit on July 25 acquired the deposits and some assets of a failed bank holding company based in Arizona which had branches in Nevada, California and Arizona.

Mutual of Omaha paid a 4.41% premium to acquire the deposits of First National Bank, which operates 15 branches in Arizona and 10 in Nevada; and First Heritage Bank, which specializes in commercial banking and has three locations in the Los Angeles area. They were units of Scottsdale, Ariz.-based First National Bank Holding Co.

The transaction cost Mutual of Omaha an estimated $130 million, according to Jeff Schmid, chairman of Mutual of Omaha Bank, in an interview.

Schmid said the acquisition of these accounts aligns with Mutual of Omaha Bank’s growth strategy of expanding into fast-growing markets where Mutual of Omaha has a strong brand presence and a base of insurance customers.

The core insurance products for Mutual of Omaha are life insurance, disability and long-term care products in the personal lines area, he said, with Mutual of Omaha also offering group life, group dental and 401(k) management in the commercial sector.

But, he said, the acquisition is in line with Mutual of Omaha Bank’s strategy of using the insurance company’s strong balance sheet to “build a good, traditional banking franchise within the company.”

He said this started last November when the Mutual of Omaha Bank acquired non-troubled banks in Colorado and Nebraska.

Mutual of Omaha Bank had been looking at acquiring First National Bank Holding Company since last fall, Schmid said, “but the timing was just not right.” He said they were approached recently by the FDIC as a potential acquirer after being on a pre-qualified list.

Mutual of Omaha recently opened a loan production office in Des Moines and a bank in the Dallas-Fort Worth area.