Busey, mainly a downstate lender, entered the Chicago market in 2017 via the purchase of Joliet’s First Community Financial Partners, which was about the same size as Glenview State Bank is now. With the Glenview deal, Busey will add the northern suburbs to its south suburban foothold.
The deal is in the form of cash and stock, with about three-quarters of the price in cash. At 1.1 times the tangible book value of Glenview State Bank, the price is relatively modest. With no presence in Glenview or the northern suburbs, Busey is unlikely to close branches or lay off workers.
Glenview State Bank CEO Paul A. Jones opted not to auction the bank and instead worked exclusively with Busey, industry sources said. That decision likely kept the price lower than it might have been.
In a release, Jones called Busey “the right strategic partner to continue Glenview State Bank’s customer- and community-focus.”
But, even had the Jones family run an auction, the timing wasn’t perfect. What makes Glenview State Bank exceptional—its stable deposit base—isn’t as valuable in today’s environment as it would have been several years ago. Today’s challenge for many banks isn’t attracting deposits but finding good loans to make. With interest rates extraordinarily low, it’s difficult for conventional banks to make money on excess deposits.
Busey’s 2017 $236 million purchase of First Community Financial Partners was valued at 2.1 times First Community’s book value at the time.
Loans at Glenview State Bank make up just 40 percent of its deposits. Most banks strive for a ratio closer to 80 or even 90 percent. The bank posted net income of nearly $9 million through the first three quarters of last year, putting it on course to generate a return on equity of a lower-than-average 7 percent in 2020.
Though prices for selling banks are lower than they were several years ago, observers expect deal-making to accelerate in 2021 after the pandemic chilled deal talks last year.
Glenview State Bank has four branches in its hometown and one each in Mount Prospect, Northbrook and Northfield. It employed 145 as of Sept. 30, according to a filing. This year was to be the bank’s 100-year anniversary. Launched in the same building that now is home to Glenview’s Bess Hardware Store, it was acquired in 1960 by Cummins-American Corp., owned by the Jones family. That deal combined a manufacturer of coin counting machines, typically sold to banks, with a bank.
The Jones family sold the coin-counting operation last year to Malvern, Pa.-based Crane Payment Innovations.
The transaction with Busey will vault the Champaign-based bank to nearly $12 billion in assets. In 2017, when it struck the deal in Joliet, it was less than half that size, at $5.4 billion.
“Being a strong, local community bank for the communities we serve remains a top priority to both Busey and Glenview State Bank,” Busey CEO Van A. Dukeman said in a release. “We believe this strategic merger will benefit our clients through enhanced capabilities and products in commercial banking, wealth management and depository services.”
The branches will be branded as Busey Bank after the deal closes, which the banks anticipate will occur in the second quarter.
Stephens represented Busey in the deal while Piper Sandler represented Glenview State Bank. Vedder Price served as Busey’s legal advisers, and Barack Ferrazzano Kirschbaum & Nagelberg as Glenview’s.