Two historic banking institutions -- Tri-State Bank of Memphis and New Orleans-based Liberty Bank and Trust Company -- are set to complete their merger on Friday (Oct. 8).

Tri-State Bank of Memphis will complete its merger with Liberty Bank and Trust Co., the largest African-American owned financial institution in the nation, on Friday (Oct. 8).

Executives of both institutions announced the completion on Tuesday (Oct. 5).

Under the merger, the Tri-State name – long synonymous with providing financial opportunities for African-Americans – will be retired. After Friday, Tri-State Bank will become Liberty Bank and Trust in Memphis.

“It’s not just that we are an African-American bank. We are a good bank,” said Liberty Bank Memphis Senior Vice President Angel Price. “Tri-State Bank will get the benefit of our new technology. Every service that other commercial banks can offer will be available.”

Angel Price (Courtesy photo)

Both Liberty Bank Memphis customers and former Tri-State Bank customers, particularly established small business customers, are likely to see immediate benefits from the merger, Price said.

“With access to new capital, and as part of a larger financial organization, our loan limits will rise from about $1.2 million to $5 million for our most creditworthy borrowers,” Price said. 

“In addition, we will collaborate with our customers to leverage technology and put an array of banking services, quite literally, in the palms of their hands.”

Customers will be able to use their mobile, hand-held and desktop devices for such services as opening accounts, making deposits, paying bills and borrowing money, as efficiently as an actual visit to a bank branch, Price said.

The all-cash transaction closes on Friday (Oct. 8) now that Tri-State shareholders, boards of both institutions state and federal banking regulators have approved the sale and merger of operations.

Archie Willis III (Screen capture)

Archie Willis III, chairman of Tri-State Bank, said both institutions benefit because of their similar cultures, missions and legacies in “serving the underserved and benefiting their communities.”

“This is a thoughtful combination,” said Willis.

“The Memphis market is a natural extension for Liberty Bank. It’s a good fit. Plus, the operational expertise and financial strength that Liberty Bank brings to town enhances our ability to serve current customers and create new opportunities. This is clearly a win-win opportunity for all involved.”

Willis said he was pleased that Liberty Bank has extended offers of employment to all Tri-State Bank employees, who desire to be a part of the transaction. 

With this newest acquisition, Liberty Bank, based in New Orleans, now boasts operations in 10 states – Alabama, Illinois, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Texas and Tennessee.

Both institutions are Community Development Financial Institutions (CDFIs). These enterprises are private financial institutions that have committed to delivering “responsible, affordable lending” to help low-income, low-wealth and other disadvantaged people and communities join the economic mainstream, according to the Opportunity Finance Network.

Financially disadvantaged communities depend largely on predatory, pay-day loan companies to borrow money. These small loans push customers further in debt. 

Liberty hopes to change all that for many, said Price.

Alden J. McDonald Jr. (Screen capture)

Liberty Bank and Trust President and CEO Alden J. McDonald Jr. called Tri-State Bank’s staff, “a thoughtful and talented team.

“Their passion mirrors our passion. Our missions, to serve our communities as agents for constructive change, are aligned.

“With access to larger lending limits, with a broader offering of financial products and services, and with the convenience and efficiency of our digital platforms, it is not unrealistic to expect the Liberty Bank Memphis team to double our bank’s share of the market in short order.” 

McDonald has led Liberty Bank for most of its nearly 50 years.

Liberty Bank started with $2 million in assets in 1972. During the reporting period ending June 30, 2021, Liberty Bank and Trust Company had approximately $890 million in total assets, according to a company news release.

As of June 30, 2021, Tri-State reported approximately $113 million in assets and $102 million in deposits. Tri-State Bank is 75 years old. 

Tri-State Bank of Memphis was founded in 1946 by the late Dr. J. E. Walker, who also was one the founders of Universal Life Insurance Co., and his son, the late A. Maceo Walker. 

The bank pioneered signature loans, real estate loans and church loans to African Americans – without a special endorsement, according to the bank’s website.

The website continued, “Perhaps the most far-reaching impact was that of home ownership. Prior to Tri-State’s existence it was difficult for African Americans to make loans on their homes or toward the purchase of homes.

“In its first ten years, in excess of $10 million of first mortgage loans on homes were made. This $10 million figure represented home ownership for over 2,000 black families.”

TSB played an important role in the civil rights struggles of the 1950s and 1960s. Local sit-ins were planned in the bank’s boardroom, and bank officials kept the vault open one night to provide bail money for protesters. 

When the Lorraine Motel, site of the assassination of Dr. Martin Luther King Jr., was faced with foreclosure in 1982, Tri-State Bank provided $60,000 in loans to help save the facility. The motel became the centerpiece of the National Civil Rights Museum.