Merger expands Minnesota footprint
Citizens Community Federal, N.A., Altoona, Wis., and Wells Federal Bank, Minn., plan a merger that will result in Citizens moving farther into southern Minnesota. Citizens is currently focused on northwest Wisconsin, south central Minnesota and has two branches just outside of Detroit. The deal is expected to close in the third quarter.
“The transaction is a transformative event for us, as it better balances the mix of both our deposit base and loan portfolio, and expands our franchise into new, culturally compatible markets,” said Stephen Bianchi, president and CEO of Citizens.
Last May, Citizens completed an acquisition of Community Bank of Northern Wisconsin, Rice Lake.
“We started 2017 with momentum from the Community Bank of Northern Wisconsin integration which helped generate a 25 percent growth in revenue and 51 percent increase in core earnings year-over-year,” Bianchi said. “Our efforts to streamline our operations, reduce branch expenses, close and consolidate branch locations and remix our balance sheet, are beginning to generate results. While the rise in interest rates last quarter interrupted some loan closings, we are encouraged by our commercial loan pipeline and deposit generation priorities for the coming year.”
Around the same time it announced the Wells acquisition, Citizens also announced it will close two offices in late June, one in Lake Orion, Mich., and one in Ridgeland, Wis.
“As part of our branch profitability review through our strategic planning process, we decided it was prudent to close these offices,” Bianchi said. “This approach is consistent with our current practice of closing less-profitable branches and providing additional electronic services to our customers.”
Missouri-Illinois deal completed
First Clover Leaf Bank, N.A., Edwardsville, Ill., has been fully converted to the bank brand of First Mid-Illinois Bank & Trust, N.A., Matoon, Ill., following completion of a merger.
The banks worked together for several months to make the transition as smooth as possible for First Clover Leaf customers, who received welcome packets in the mail with information about their accounts and any changes they may expect.
“We’ve been getting the word out through direct mail, email, TV, radio, our websites and other means so that customers are prepared,” said Lisa Fowler, First Clover Leaf Bank regional president.
With the completion of the First Clover Leaf acquisition, First Mid now has 53 branches and 66 ATMs across Illinois. This growth expands its overall service to 37 Illinois and Missouri communities. First Mid Chairman and CEO Joe Dively said the bank will continue looking for growth opportunities, including insurance and wealth management services.
Generational family banks to combine
Denver-based Centennial Bank and Trust, a subsidiary of Heartland Financial USA, Inc., Dubuque, Iowa, and Citywide Banks, Aurora, Colo., have agreed to merge.
The $1.4 billion Citywide Banks is a 53-year-old commercial bank with 12 branches across metro Denver and Boulder.
Joined with the $900 million Centennial Bank and Trust, the resulting brand will become Heartland’s largest bank subsidiary in one of the country’s best growth markets. The combined organization will have 29 Colorado branches in total operating under the Citywide Banks label.
The bank will be led by Kevin Quinn as president and CEO. The remainder of the leadership team will be made up of Centennial Bank and Trust and Citywide Banks executives after the banks are merged. Current Centennial Bank and Trust President, Steve Ward, will remain on board to blend the credit and operating cultures of the two organizations. Following the systems conversion, Ward will remain with Heartland in an executive role.
Kevin Ahern will remain chairman of the combined entity and Jim Basey will serve as vice chair of the board, supporting Quinn in his expanded role.
“It’s an in-market transaction and we have a proven track record successfully completing and converting 10 community bank acquisitions since 2012, and both banks have strong local management,” said Lynn Fuller, Heartland’s chairman and CEO.
The deal brings together two veteran banking families, the Fullers and Schmitz’s. Marty and Jeff Schmitz also will remain on the board of the combined entity. Marty Schmitz, Citywide’s holding company chairman, said familiarity was important to the deal.
“We recognize the remarkable similarities between the Schmitz family and the Fuller’s with multigenerational banking — bankers creating a legacy for the future,” Schmitz said. “We selected Heartland because we see this organization is the next chapter in our journey and the high likelihood of our heritage and business philosophies will be preserved into the future.”
Prospectively, Heartland will hold assets of $9.8 billion across 11 bank subsidiaries and own 124 full-service banking locations operating across 12 states after closing the Citywide transaction. The bank is bracing to cross the $10 billion regulatory threshold.
“We’ve been focused on preparing ourselves for this eventuality for quite some time, and have identified a series of steps we can take to ensure that reaching the $10 billion asset level will not happen until 2018,” Fuller said. “We feel we’re in a solid position to navigate the regulatory requirements associated with passing the $10 billion threshold.”
Bryan McKeag, Heartland’s CFO, said the holding company has a plan in place to keep asset size in check for a year without disrupting loan growth, as well as manage increased regulation.
“First, we have had a DFAST stress test and taskforce in place since mid-year 2016,” McKeag said. “Second, we are in the process of hiring a director of stress testing. Third, late in 2016 we had a very positive initial discussion with the Federal Reserve regional banking organization. And we have been and are continuing to invest significantly to develop our enterprise risk management capabilities and processes.”