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Fixing up FailuresSince March 2009, Great Southern Bank has doubled its locations through three acquisitions of failed banks. In 2009, Great Southern gained 17 branches with the closure of Paola, Kan.-based TeamBank and 15 banking centers with the failure of Iowa-based Vantus Bank. It added 27 braches Oct. 7 after Ellington-based Sun Security Bank closed it doors. Great Southern operates 103 locations in five states. 

Yellow - Existing Great Southern communities
Blue - Former Vantas Bank communities
Green - Former TeamBank communities
Red - Former Sun Security Bank communities

Source: Great Southern Bank
Fixing up Failures
Since March 2009, Great Southern Bank has doubled its locations through three acquisitions of failed banks. In 2009, Great Southern gained 17 branches with the closure of Paola, Kan.-based TeamBank and 15 banking centers with the failure of Iowa-based Vantus Bank. It added 27 braches Oct. 7 after Ellington-based Sun Security Bank closed it doors. Great Southern operates 103 locations in five states.
  • Yellow - Existing Great Southern communities
  • Blue - Former Vantas Bank communities
  • Green - Former TeamBank communities
  • Red - Former Sun Security Bank communities
Source: Great Southern Bank

Great Southern picks up failed bank, 27 branches

Posted online
Great Southern Bank is at it again.

The bank’s holding company, Great Southern Bancorp Inc. (Nasdaq: GSBC), added 27 branches in southern and central Missouri after it entered into an agreement with the Federal Deposit Insurance Corp. to purchase the assets of Ellington-based Sun Security Bank. The Missouri Division of Finance shut down Sun Security on Oct. 7 after its board of directors agreed to hand over its assets to the regulatory body.

The branches have reopened under the Great Southern banner, with crews from Pinnacle Sign Group working Oct. 7–8 to install the first round of signage. Sun Security operated in 15 counties.

The deal grows Springfield-based Great Southern’s footprint to 103 locations across five states and its assets to more than $3.7 billion. Great Southern is assuming roughly $287 million in deposits from Sun Security Bank and purchasing roughly $245 million in loans and $35 million of other real estate owned at a discount of $55 million. The loans exclude approximately $4 million of consumer loans and other real estate owned by Sun Security as part of the $351.9 million loss-sharing agreement between the FDIC and Great Southern.

As of June 30, Sun Security had roughly $355.9 million in assets and $290.4 million in deposits. The bank’s financials were highly stressed, indicated by a troubled asset ratio of 324.1, as of June 30, when Sun Security recorded a $15 million net loss, according to BankTracker.com. The ratio compares a bank’s troubled assets to its capital and loan loss reserves. The national median for banks was 14.3.

Sun Security is the third failed bank acquired by Great Southern. The bank purchased Paola, Kan.-based TeamBank N.A., with $660 million in assets and 17 locations in March 2009, and Sioux City, Iowa-based Vantus Bank’s 15 banking centers and $500 million in assets in September of the same year.

“We have been an active FDIC acquirer,” said Great Southern President Joe Turner. “We look for opportunities to acquire franchises that fit strategically with us. With Sun Security, we acquired an attractive franchise in a transaction that really makes good sense for our shareholders.”

Turner said the southern Missouri locations and the fact that Great Southern didn’t compete directly in nearly all of the communities that Sun Security served made it a quality candidate.

FDIC spokesman Greg Hernandez said the agency contacted 346 potential bidders and received 12 bids from three bidders.

He said the FDIC is required to select the bidder that presents the least cost to the Deposit Insurance Fund, and Great Southern’s deal is expected to cost DIF $118.3 million.

Once a failing bank has notified the state regulatory authority that it will fail, the FDIC begins a 90- to 100-day process to select a buyer.

“Through this process of purchase and assumption agreements, the FDIC can continue those banking services in those communities and people can continue to use their banking services,” Hernandez said. “That’s why bank failures are seamless to the general public. The only thing they’ll see is the next time they visit the bank in person or online is that the bank has a new name.”

Great Southern’s transaction included all deposits, Hernandez said, meaning even those accounts that may have been above the $250,000 deposit insurance limit were transferred to the Springfield institution.

Great Southern expects to have the banking systems fully merged by February, and already Great Southern ATMs are available for use by Sun Security customers without fees, said Great Southern spokeswoman Kelly Polonus.

Turner said there would be some job losses where there is duplication among Sun Security’s 150 employees, but he thought they’d be minimal.

“We really didn’t have much in the way of branch overlap, and our practice has been to keep the same folks taking care of their customers that have always taken care of their customers,” Turner said.

In January, Great Southern Director of Operations Doug Marrs told Springfield Business Journal more than 50 percent of the former Vantus and TeamBank employees were on board with Great Southern, but staff in many administrative or specialized-products positions already filled by Great Southern counterparts were let go shortly after the purchases.

Turner said the experiences of acquiring TeamBank and Vantus has prepared Great Southern staff to lead a smooth transition.

Sun Security Bank is the 76th FDIC-insured institution to fail this year, and the first in Missouri.

In May 2010, Springfield-based Southwest Community Bank was closed by regulators and purchased by Arkansas-based Simmons First National Bank (Nasdaq: SFNC).[[In-content Ad]]

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