Central Trust completes purchase of Springfield Trust Co.

The Missouri Division of Finance on Nov. 20 approved Central Trust and Investment Co.'s acquisition of Springfield Trust Co.

Now begins the process of merging the two companies' operations, according to Bob Jones, president and CEO of Jefferson City-based Central Trust.

"It's a multistep process, and ... the next step in that process is that now we have to apply to the Missouri Division of Finance for permission to merge the charters," Jones said. He noted that he sees nothing that should prevent the division from approving the merger, which would likely be completed in the next few months, though "you never assume anything until it's done," he said.

In the meantime, the two entities will continue to operate separately under the same ownership; the only change thus far in operations or personnel, Jones said, is that STC founder and former President John Courtney now serves on the advisory board for Central Trust. Jones is now president of both companies.

The two companies boast a combined $3.6 billion in assets under management and offices in Springfield, Branson, Nixa, St. Louis, Kansas City, Columbia, Jefferson City and Osage Beach, with nearly 100 financial professionals on staff.

While Springfield Trust had been working with BKD Corporate Finance for several months to find a buyer, Central Trust's interest in the acquisition came from the ability to grow its presence in the Ozarks, which Springfield Senior Vice President and Trust Manager Jami Peebles said is ripe.

"I think the Springfield market and the Branson market continue to have retirees moving in from all over the United States, which provides us with more opportunity, and the growth potential is unlimited," she said.

That sentiment was echoed by Dwight Rahmeyer, CEO of Trust Company of the Ozarks, which after the merger is now the only Springfield-based independent trust company.

Rahmeyer said that while he is usually of the philosophy that more competition is better, he feels there is definitely room for multiple companies.

"Being the remaining independent trust company headquartered in Springfield will have an impact with some people in the community and where they might choose to place their investments," he said. "(Central Trust's success) depends on how Central transitions the whole relationship, and how well they treat their customers. If they do the right things, they should be successful - there's certainly room for them."

The Central Trust merger with STC is not the first case of shrinking numbers in the local trust company market. Bank of America closed its local asset management office in March following its acquisition of investment firm Merrill Lynch. Once the latest merger is complete, there will be six trust companies operating in Springfield, according to recent SBJ list research.

As for the possibility of future consolidation in the industry, Jones said he wouldn't rule it out, though it likely will not happen at the same national or global level as consolidation in banking that has created megabanks such as Bank of America and U.S. Bank.

"As the regulatory environment gets stricter and as the need to upgrade systems and platforms becomes more costly, just to be competitive you need to make certain investments, and you need to be of a certain size to make those investments," Jones said. "I think the consolidations are still going to be at a local enough level that the client services will still be better than it was if you're managed out of Charlotte or Minneapolis."[[In-content Ad]]