Signature Bank, The Bank: Community banks announce merger plans

Two community banks born from the large bank merger trend of the mid- to late-1990s, have decided to merge.

The merger of Signature Bank and The Bank, pending shareholder and regulatory approval, would result in The Signature Bank. It would hold approximately $600 million in assets.

The deal, devised in 40 meetings over the last 60 days, would bring together 140 associates among seven bank locations. The bank will have 10 ATMs.

Executives of both banks announced their intent to merge during an Oct. 30 press conference at the Springfield Area Chamber of Commerce, where they unveiled the banks new name and logo. According to those involved, the merger would represent the first between two independent, locally owned Springfield banks.

The stock-for-stock transaction, with combined equity value of $44 million, has received unanimous approval from both banks boards of directors, said David Kunze, Signature Banks CEO, who will be serving as CEO and chairman of The Signature Bank.

The next step is to get shareholder approval, Kunze said.

A shareholder vote is coming in December, with the final step FDIC regulatory approval expected in mid-January.

Board member Jack Stack is confident shareholders will view it as a positive step.

Ive talked to a lot of the shareholders and theyre really feeling great about it, he said

Kunze expects the merger to create stock appreciation and the potential for higher dividends, though its not known to what extent at this time.

Todd Parnell, CEO of The Bank, will become president and COO of The Signature Bank.

Robert Fulp, named senior executive vice president of The Signature Bank, rounds out the new senior management team. Fulp was executive vice president for Signature Bank.

I think with the combination of the management weve got in both banks I dont see anything but just a total advantage for the shareholders, said Jim D. Morris, Signature Banks largest shareholder. Its just a golden opportunity. Morris owns Morris Oil Company.

Kunze and Parnell call it a merger of equals. Signature Bank brought to the table more than $320 million in assets, while The Bank had approximately $300 million in assets.

Its not your typical merger, where theres a dominant acquiring bank, Kunze said. Its just a merger of equals; two independents trying to accomplish the same mission, and we can do it better joining forces.

The new group has lofty goals: $1 billion in assets in five years. They say its realistic.

I dont want to base my bonus on it, Parnell jokingly said, then got serious.

I think we can (reach $1 billion), I really do.

Kunze added that $1 billion is the next logical step for the bank.

We are entering this with a great deal of positive momentum, Parnell added. Were both coming off our best years ever. Weve got the same systems and the same management philosophy.

According to Kunze, Signature Bank and The Bank were growing by more than 20 percent annually. The industry average is 8 percent growth, he said.

Kunze said all board seats will be retained, with a combined holding company board and a combined bank board. The holding company is City Bancorp Holding Company.

Kunze said all employees and bank locales will be retained because there is no overlap.

Kunze said he expects to retain clients from both banks because ownership and bank decisions will continue to be local. We dont anticipate any loss of customers because of that fact, he said. Were combining two banks with similar philosophies.

Both banks operate under open-book management.

Banking competition

Signature Bank and The Bank were born within six weeks of each other in 1997.

Kunze and Parnell, the two executives heading up the merger, have known each other since 1978 and both are Drury University graduates.

The merger will put an end to a friendly competition.

Its going to be extremely exciting to be competing together against someone else, instead of competing against each other, Parnell said.

Guaranty Bank CEO Don Gibson said the merger is somewhat surprising, but logical for banks seeking large growth. He said Guaranty Bank continues to be open to possible mergers.

It gives them all kinds of opportunities, he said.

They could take the company public; maybe they have aspirations of selling out to a larger financial institution.

The merger sets the banks legal lending limit at $16 million, according to Fulp.

Kunze said future plans include building other facilities in Springfield and possibly elsewhere in the state.