First Colorado National Bank, the wholly-owned subsidiary of First Colorado Financial Corp. ("FCFC") and headquartered in Paonia, announced it has entered into an agreement and plan of merger and reorganization with BoeFly, LLC, a non-bank financial technology firm that operates an online platform that connects small business lenders and borrowers. BoeFly's majority owners are Alvin Sarter and Robert Tannenhauser.
The transaction, which requires FCFC shareholder and regulatory approval, is unique in that BoeFly will become a wholly-owned subsidiary of the bank, which will allow First Colorado an opportunity to integrate BoeFly's proven financial technology to enhance First Colorado's small business commercial banking platform. Given the specialization in small business lending by both parties, there are considerable operating efficiencies and economies of scale by assimilating the technology, expertise and best practices of both entities. Additionally, the transaction will provide growth capital to the bank.
Current bank president Brad Harding, who will also assume the role of CEO after the transaction, stated, "It is extremely rare to be able to find a non-bank fintech company with a business focus and credit culture that is compatible with those of a small community bank located in rural America, but that is exactly what will occur with this combination. The BoeFly team shares the bank's commitment to customer service, loan quality and internal controls."
Stan Park, current CEO of First Colorado, added, "The new capital being contributed as part of the transaction will give the bank the opportunity to expand its services and branch network here in Delta County, as well as extend its footprint to other parts of Colorado. We are excited about continuing to be a vibrant part of the community."
First Colorado has been a high performing bank for a number of years and anticipates immediate, positive effects as a result of the transaction and the additional capital, as the bank intends to operate with the best in financial technology, in order to improve lending and operating efficiencies and enhance internal controls.
Other than adding office space to accommodate planned growth in staff, customers will not see many changes unless they are applying for a small business loan, where the new financial technology partner brings sophisticated resources to the bank.
The first-of-its-kind transaction is expected to be completed in the fourth quarter of the year.