Local Banks Merge, Establish Stronger Capital Position

The merger of First Scottsdale Bank and Commerce Bank of Arizona, Inc.’s parent company, CBOA Financial, Inc., will establish the new entity as the second-largest commercial bank franchise headquartered in Arizona when the transaction closes, which is expected to happen in the second half of this year. The new Commerce Bank — the name under which the merged entity will operate — will have more than $300 million in assets and “will have more ability to raise capital,” says Rich Vogel, chairman and CEO of First Scottsdale Bank. “Our combined organizations are in a very strong capital position and we will be aggressively lending to credit-worthy customers in both Phoenix and Tucson.”

Consolidation is a trend in the banking industry nationwide, says Paul Hickman, president of the Arizona Bankers Association, “and Arizona is no exception.” He notes that compliance and technology costs have made community banking a more difficult endeavor, and says that, because of economies of scale, “banks can deal with increased compliance costs better when they’re a larger institution.”

Vogel, who has been a banker for 30 years, says he’s seen many swings in the market. “Nothing stays down forever,” he says. “We already see some recovery in the economy.” Noting they are now in the two largest markets in Arizona and that they are “very bullish on both markets in the long run,” Vogel adds, “”We are a stronger bank with the combination of these two banks; we are stronger than if we operated alone.”