Great Southern acquires Illinois-based Valley Bank

Springfield-based Great Southern Bank, a subsidiary of Great Southern Bancorp, Inc. (Nasdaq: GSBC), has entered into an agreement with the Federal Deposit Insurance Corp. to acquire certain loans and other assets and assume all deposits of Moline, Ill.-based Valley Bank, according to a news release.

Great Southern spokeswoman Kelly Polonus said in an email no money traded hands in the deal.

Under the FDIC agreement, Great Southern is assuming around $356 million of Valley Bank deposits at no premium, certain investment securities and roughly $211 million in loans. The FDIC is retaining a portion of the loans and all of the other real estate owned in the transaction, and there will be no-loss sharing agreement between it and Great Southern, the release states.

“An FDIC-assisted transaction is different from what you normally see in an open-bank transaction,” Polonus said by email. “We paid no premium in this transaction. Of course, we will have some expenses associated with the transaction, but that is separate.”

Established in 1911, Valley Bank operates one location in Moline, Ill., and 12 in Iowa, adding to Great Southern’s presence in the Des Moines, Iowa, metropolitan area. Great Southern managed six banking centers in the Des Moines region prior to the deal that brings its total to 13 in central Iowa. The deal also offers Great Southern a chance to enter into the Quad Cities metropolitan market along the Mississippi River, the release said.

“This transaction, unlike our previous FDIC-assisted transactions, does not provide a large bargain purchase gain or loss-share coverage; however, projected future earnings related to the acquired operations are expected to be meaningful,” Great Southern President and CEO Joseph Turner said in the release.

Turner said in the release there will be no disruption in service for current Valley Bank customers.

Great Southern expects the deal to close by June 30 with effects of the transaction to be disclosed in the company’s second-quarter earnings announcement issued in late July.

Great Southern operates 112 retail banking centers in Missouri, Arkansas, Iowa, Kansas, Minnesota, Nebraska, and Illinois. The bank, which held $3.8 billion in assets as of March 31, also has loan production offices in Dallas and Tulsa, Okla. As of 10:15 a.m., shares of GSBC were trading at $30.48, compared to a 52-week range of $25.71 to $31.23.

The move marks Great Southern's fifth FDIC-assisted transaction since 2009. The Springfield-based bank purchased four failed banks between 2009 and 2012, doubling its footprint to roughly 100 branches, according to Springfield Business Journal archives.