Archive for Friday, November 21, 2008

Two banks in Lawrence call off merger talks

November 21, 2008


CornerBank and Emprise Bank have abandoned merger talks by mutual agreement, the banks’ top executives said Friday afternoon in a joint statement.

The two banks, each of which have locations in Lawrence, had announced Oct. 15 that they were discussing a merger. The talks followed up on informal discussions that had been ongoing for several years.

Now the talk has ended.

“As announced earlier in connection with the initiation of the merger talks, it was our intent to consider all aspects of their proposal and determine how a possible merger would affect our shareholders, customers, employees and the communities we serve,” said Bruce Schwyhart, president and chief executive officer of Winfield-based CornerBank. “After careful consideration, we did not feel all stakeholders’ needs would be met as necessary.”

Added Tom Page, president and CEO of Wichita-based Emprise: “While CornerBank would have fit well strategically and culturally with Emprise, it was not to be. We will continue to review acquisition opportunities as they present themselves in the future. We wish CornerBank all the success going forward.”

Page previously had indicated that Emprise had been interested in considering a merger because several CornerBank branches in the Wichita area might fit well within Emprise’s strategy. Emprise Bank is a $1.2 billion banking company with 41 locations across the state, including Lawrence branches at 2435 Iowa and 1121 Wakarusa Drive.

In July, CornerBank — a $240 million banking company with nine branches in southeast and northeast Kansas, including one at 4621 W. Sixth St. in Lawrence — entered into an agreement with the Comptroller of the Currency. The agreement required the bank to undertake several measures to improve the bank’s capitalization.


Steve Jacob 9 years, 2 months ago

Wow! I have seen/read enough business news to know this means CornerBank is going bye-bye.

lucypeanuts 9 years, 2 months ago

Not necessarily, srj. Letters of agreement with the OCC are becoming more common as regulators tighten restrictions due to economic conditions. There are varying degrees of severity of these letters. These letters are open to the public...the letter CornerBank was issued was relatively mild and primarily administrative in nature. Also, if you go to and look at CornerBank's call report, it is actually in better shape than several other Lawrence banks since it is on track for good net income, has had very few losses and has minimal past due loans. Having said that, we probably will see some restructuring in many small Kansas banks, as the combination of the current economic conditions and the regulatory environment being created in response to the sins of the large banks will make it very difficult for small, family-owned banks to remain competitive. Having these community banks gobbled up by the conglomerates will be very sad, as it results in fewer choices for consumers and in many cases a reduction in community support. Look at all the community activities CornerBank does for Lawrence...from the Christmas parade to volunteers to art shows. It will be sad if these kinds of organizations cease to exist.

Steve Jacob 9 years, 2 months ago

I just don't have any faith in banks right now. Citibank looks bad, B of A overpaid for Lynch. And we are lucky to be in Kansas. One bank in Georgia and two big banks in Cal. closed just today.

nobody1793 9 years, 2 months ago

Look at you. You used to be so cocky. You were going to go out and conquer the world. You once called me "a warped, frustrated, old man!" What are you but a warped, frustrated young man? A miserable little clerk crawling in here on your hands and knees and begging for help. No securities, no stocks, no bonds. Nothin' but a miserable little $500 equity in a life insurance policy. You're worth more dead than alive!

BigPrune 9 years, 2 months ago

I'm surprised most of the banks are still in business in Lawrence and across the nation. Are any banks loaning money to consumers or just to themselves?Our Reps in Washington shouldn't have bailed the big greedy bastards out since they have been screwing the consumers with the b.s. ATM fees and their "collected" delays on deposits b.s. They're not making money off our money during the delay, come on? -they won't credit large deposits until THEY decide to declare the funds "collected" - THAT is the biggest screw job. So if you deposit $20 Grand, you might as well expect the full amount won't be credited for 10 business days. Trying to get around this con game I wire transfer, but the fees range from what, $15.00 to send and $8.00 to collect? So I pay it - I consider it a "convenience fee." I should just ask for cash if it's local. Cashiers Checks are considered a check, NOT cash and so they get delayed as well and they cost too. In the news the banking industry complains that payday loan companies charge $20 a week to loan money, but don't banks charge around $30 if someone bounces a check? Those places cut into the bank's bottom line -or non-interest income coffers. Some banks tried to charge $5.00 each time a depositor asked for their balance. The usury rates are not controlled by the states - I saw a doctor being interviewed who got a loan from B of A at 8% then a couple of months later B of A sent out some junk mail looking letter stating the interest rate was increasing and this person had to write back that they didn't want their rate increased, they didn't respond because they thought it was junk mail and now this guy's loan is 42% interest - legalized loan sharking at its finest. I'm surprised we haven't seen some negative press from the banking industry about the ills of doing business with Guido the loan shark.When this whole thing blows over, there will be probably 5 big banks running the country and dictating to the little banks. srj, didn't Merrill Lynch Europe sell for $20? The problem with this credit crisis isn't going to go away until Washington makes it attractive for people to buy homes again and create a demand to purchase. They should let people depreciate the cost of a home purchase (the price paid) over 5 years. There would be investors coming out of the woodwork to take advantage. It could apply to second homes and investment properties. This would drive up the value of homes and the bank's mortgage would be secure again.I wonder if CITI knew they were going down the drain when they offered to not foreclose on people's homes? That might tug at Congress to bail them out too.

Steve Jacob 9 years, 2 months ago

I think right now, the banks are scared to lend money not because they don't think the loan will be repaid, but they need to cover any runs on the bank that might happen. You know some people have emptied bank accounts over the last three months (they are FDIC insured, but it's their money and they can do whatever they want with it).Even a solid bank like Cap Fed (look at stock price) can get shut down if everyone took their money out. That is the one thing I will question ALL banks on. It is shown the customers can close a bank, because banks NEED the deposits. So why are we "rewarded" with high fees and almost no interest return on savings? If banks are loaning money at 6.5%, why to depositors get back 1% (or less).In the end, banks messed up, and are paying the price. Trust me, going to the government and getting money will give them nightmares in the end. Banks like Cap Fed who are always strict lending money will be stronger coming out of this.

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