As financial institutions across the country deal with turmoil, two Kansas banks with Lawrence ties announced Wednesday that they are in merger talks.

Winfield-based CornerBank and Wichita-based Emprise Bank officially have entered merger discussions, the presidents of both companies announced in a joint press release.

And a banking expert at Kansas University said consumers probably should expect to hear more merger talk in the future.

“Oftentimes, putting two smaller banks together can make one stronger bank,” said Bob DeYoung, a professor of banking at Kansas University’s School of Business.

No deal has been struck yet between Emprise and Corner Bank. CornerBank is a $240 million banking company with nine branches in southeast and northeast Kansas. It has a Lawrence branch at 4621 W. Sixth St. Emprise Bank is a $1.2 billion banking company with 41 locations across the state. It operates two Lawrence branches, at 2435 Iowa and 1121 Wakarusa.

The proposed merger comes at a time when federal bank regulators have raised concerns at CornerBank. In July, CornerBank entered an agreement with the Treasury Department’s Comptroller of the Currency who required the bank to undertake several measures to improve the capitalization of the bank.

CornerBank President and CEO Bruce Schwyhart did not return phone calls on Wednesday seeking comment on whether the regulatory action played a role in initiation of merger talks.

In a written statement, he indicated it did not. He said Emprise and CornerBank had visited informally about a merger for several years.

Tom Page, president and CEO of Emprise, said his bank was interested in the merger because CornerBank’s franchise of several banks around the Wichita area fit well with Emprise’s strategy.

DeYoung – the KU banking professor – said he thought the current financial environment could lead to a significant number of bank mergers.

“I think a lot of smaller community banks would be smart to merge so they can get large and take advantage of production economies,” DeYoung said.

For consumers, that may mean they’ll be dealing with a different name on their debit cards, and may need to keep an eye on whether their favorite branch location remains open following a merger.

DeYoung said branch closings often were the most visible sign of a merger. It was unclear whether Emprise and CornerBank would keep all three Lawrence branches open following a merger.

DeYoung, though, said bank mergers should not cause consumers to become nervous about the safety and security of their banks. He said most consumers should rest easy knowing the FDIC has increased the amount of deposits they guarantee from $100,000 to $250,000.

For people who have more than $250,000 in a particular bank, DeYoung suggested that they talk with the bank about how the balance above $250,000 also can be insured. He said many banks have the ability to offer additional deposit insurance.

“They definitely want to keep your business right now,” DeYoung said. “They want your deposits.”

And even though the financial markets have been rocked lately, DeYoung said nothing has happened that has caused concern about whether the FDIC would be able to make good on its promise to insure against losses.

“There is absolutely no danger of the FDIC not being able to take care of its obligations,” DeYoung said.