OGDEN -- Centennial Bank of Ogden is nearing completion of a joint venture with Orem-based Vision Bankcard that will improve Centennial Bank's financial position and enable it to offer more bank services, including access to customers worldwide.A statement issued Friday by Centennial Bank said the deal "has closed in escrow and awaits final regulatory approval. Centennial will improve to a 'well-capitalized' position as a result of receiving capital from the purchase of bank stock."
The joint venture was announced in September. Roger Dickson, marketing director for Centennial, said the bank hopes for final regulatory approval as soon as next week.
Centennial Bank is an Ogden-based bank with five branches around Top of Utah. Vision Bankcard offers Internet services to commercial clients.
Centennial Bank is one of several Utah banks that have run into financial difficulties because of the sagging economy.
Barnes Bank in Kaysville was taken over by the Federal Deposit Insurance Corporation in January. Magnet Bank in Salt Lake City was taken over by the FDIC last January.
Dickson said Centennial specializes in construction loans so it was hurt by the housing crisis that broke in 2007. In June 2009, the FDIC and Centennial entered into a stipulation and consent agreement to the issuance of a cease-and-desist order to Centennial, ordering the bank to improve its financial position.
Court papers say that order was based on an FDIC "Report of Examination" issued in October 2008 that found Centennial had a large volume of poor-quality loans, needed to improve its operating practices and needed to acquire more capital, which is money on hand to cover potential losses.
Friday's news release from Centennial said that, in addition to becoming "well capitalized" by selling stock to Vision Bankcard, "the bank will be strengthened by receiving deposits from Vision's prepaid card customers and merchant account customers. Vision Bankcard provides payment technology and services to thousands of retail and e-commerce merchants throughout the world."
The joint venture will allow Vision Bankcard "to issue debit cards, credit cards and other bank-sponsored products. Centennial's customers will be introduced to Vision's advanced e-commerce services."
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