A group of five investors, four of whom are already an officer or board members of First National Bank of Brookfield, has applied to the Federal Reserve System to form a bank holding company in order to control the bank, whose lone branch and headquarters is at 9136 Washington Ave. in Brookfield.
It will take anywhere from 90 to 120 days for the application to be processed by the Federal Reserve, said Phil Richard, president of the bank and one of the five seeking to form the holding company, which is called Brookfield HoldCo Inc.
The other principals listed in the holding company’s application to the Fed are First National Bank of Brookfield board Chairman Michael J. Ryan and directors Jeremy Levy and James P. Grusecki.
The chairman of Brookfield HoldCo Inc. is listed as Edward C. Fitzpatrick, a retired lawyer who assisted in a similar bank holding company application in 2015 and is the former executive vice president of FBOP Corporation.
“At the bank level, there will be no change; nothing will be different,” said Richard of the impact the change of ownership will have if the application is approved. “A holding company allows for greater flexibility.”
First National Bank of Brookfield was owned by a holding company called 1st Brookfield Inc. until 2015, when it was dissolved after another group of investors applied to form a holding company to purchase the bank’s stock from a creditor who’d planned to foreclose on a $10 million debt owned by the bank.
The creditor was unnamed in that 2015 application to the Fed as were the principals of the proposed holding company, which had been dubbed Brookfield Financial Holdings Inc. The only publicly available principal of the proposed holding company was its president, Jeremy Levy.
Shortly after submitting its application to the Fed, Brookfield Financial Holdings Inc. withdrew it. It’s unclear exactly how the debt issue was resolved, but soon after the application withdrawal, Levy was named to First National Bank of Brookfield’s board of directors along with Ryan, who was named chairman.
That board reshuffling, however, did end what had been a turbulent several years for First National Bank of Brookfield.
The 2008 real estate crash had left the bank with $25 million in loans that were not being paid back and the bank’s regulatory agency, the Office of the Comptroller of the Currency, entered into what was known as a “formal agreement” to remedy the institution’s “unsafe and unsound banking practices.”
Richard said he expected the Federal Reserve would look favorably on this latest application to form a bank holding company to acquire First National Bank of Brookfield.
Holding companies are common in banking, Richard said, and allow the institutions greater flexibility in raising capital, issuing debt and addressing problem assets.
“It lends more strength to the bank,” Richard said.
While Brookfield HoldCo Inc. would own the bank if the application were approved, Richard said the bank’s board of directors would remain the same.
“We have a good bank board and we didn’t want to change it,” Richard said. “And this was an opportunity to bring Ed [Fitzpatrick] back into the banking world with experience in banking transactions and litigation.”
If there will be any noticeable change to First National Bank of Brookfield in 2023, said Richard, it may be its name.
“There is one thing we are considering,” he said. “Part of it might be changing the name to Brookfield Bank.”
But, he said, the institution is committed to community banking.
“A bank like ours is able to apply logic and commonsense,” Richard said. “We talk to our customers; we know our customers well. We know what we’re good at and stick to that.”