Citizens Union purchases Missouri State Bank: $4 million cash deal places bank in new market

Citizens Union State Bank signed a multimillion-dollar cash deal last month, marking its entrance into the Springfield banking market. Citizens Union, based in Clinton, acquired the Missouri State Bank and Trust branch at 321 W. Battlefield for $4 million.

That's a small price to pay, considering Springfield's potential market growth and Missouri State Bank's existing business, said Jim Smith, Citizens Union's CEO and chairman. Citizens Union assumes the approximately $30 million loan volume and $34 million in deposits Missouri State Bank established here.

Citizens Union paid $2 million for Missouri State Bank's real estate and tangible assets, plus 6 percent of its deposits, which equaled $2 million.

"We're delighted to not only move into the Springfield market, but to have the branch there that gives us a real springboard," Smith said from his Clinton office.

In other words, expect more branches in southwest Missouri. Citizens Union, whose holding company is Exchange National Bancshares Inc. of Jefferson City, operates nine branches in Clinton, Windsor, Collins, Osceola and Springfield. Smith singled out southwest Missouri as an appealing market, having just the type of communities the bank's growth plan seeks.

"It is a real growth area. We would be interested in moving in that direction," he said, mentioning Branson as another possible site. "Our five-year strategic plan calls for us to move to more growth-type markets."

New ownership, same personnel

Despite the bank's new ownership and new signage, operations remain the same, according to branch president Jim Riggins, who served as president under the Missouri State Bank name as well. Riggins said all personnel were retained through the acquisition. There are seven employees.

"Nothing has changed here," he said. "We're a business bank, primarily."

Riggins estimated that 75 percent of loans are commercial. The bank offers full commercial and personal banking lines.

After the acquisition, Citizens Union's system-wide assets are roughly $280 million up about 5 percent over last year and deposits are about $230 million, Smith said.

Riggins said expansion to Springfield is just the beginning.

"There will be more locations," he said. "We're going to expand in southwest Missouri."

The deal reunites Smith and Riggins who had worked together at Union National Bank of Springfield from 1968 to 1974. Union National Bank was acquired by Boatmen's Bank in 1973, NationsBank in 1996 and Bank of America in 1998.

Missouri State Bank, a subsidiary of St. Louis-based Trustcorp Financial Inc., continues to operate seven banking locations in the St. Louis metropolitan area.

M&A activity

Citizens Union's acquisition is among 285 transactions in the banking and finance industry for the first half of 2003, according to Mergerstat LLC, which tracks mergers and acquisitions involving United States and European business entities. The industry is down slightly from 307 transactions through June last year.

Mergerstat reports deal flow for the U.S. mid-market segment, which includes deals between $1 million and $500 million, fell 9.7 percent and disclosed deal value dropped to $68.7 billion from $82.6 billion in first half 2002.

Overall, merger and acquisition activity dropped 12.9 percent in the United States. The total dollar value of disclosed deals dropped the first six months of the year to $168 billion from $190.2 billion.

Citizens Union facts

Citizens Union's holding company, Exchange National Bancshares Inc. of Jefferson City, also serves as parent company of Exchange National Bank of Jefferson City and Osage Valley Bank of Warsaw. Since executing the Missouri State Bank branch purchase, Exchange National Bancshares has total assets of approximately $825 million. It is publicly traded on the NASDAQ under the ticker symbol EXJF.

Smith, a Southwest Missouri State University graduate, also is chairman and CEO of Exchange National Bancshares Inc. Smith is immediate past president of the American Bankers Association and serves as an officer.