Landmark National Bank is preparing to take over CornerBank’s deposits and branch location in Lawrence, the banks announced Friday afternoon.
Landmark is acquiring the CornerBank branch at 4621 W. Sixth, plus about $9 million in deposits, said Jana Dobbs, CornerBank’s community bank president in Lawrence. She expects the deal to close in April or May.
CornerBank will retain about $16 million in loan business in Lawrence, as it relocates to a smaller location in town, Dobbs said.
The pending sale comes after CornerBank — a $240 million banking company with branches in southeast and northeast Kansas — entered into an agreement last year with the Comptroller of the Currency, requiring the bank to undertake several measures to improve the bank’s capitalization.
Selling the branch to Landmark will allow CornerBank to remain active in the Lawrence business community, while operating under a less-expensive business model, said Bruce Schwyhart, CornerBank president and chief executive officer.
“Like many companies, we are adjusting our business model to be more in line with the recent economic downturn,” Schwyhart said. “Since we have built our business in the Lawrence market on commercial real estate and the housing market, it is appropriate that we reduce our overhead costs to ensure our continued profitability.”
Dobbs said the Winfield-based bank turned a profit of $1.36 million in 2008, but still needed to make changes to meet conditions outlined by regulators.
“We need to pull back a little bit, to allow the economy to rebound,” Dobbs said. “This is just like a family tightening their belt during difficult economic times.”
Landmark, meanwhile, long had planned to expand into northwest Lawrence, and had purchased a lot at the southwest corner of Sixth Street and Folks Road for a new branch. Now that Landmark will be getting an existing branch nearby, the bank plans to sell the lot.
For customers with deposits at CornerBank, the transition to Landmark will be expected to occur during a weekend: CornerBank would close the branch on a Friday or Saturday, and Landmark would open it back up the next Monday morning.
“We are pleased to be able to purchase the CornerBank facility and look forward to serving the clientele of this branch,” said Pat Alexander, president and chief executive officer of Landmark, which is based in Manhattan. “The availability of the CornerBank building will allow us to move forward with our expansion plans more quickly and economically than new construction.”
CornerBank currently has six full-time employees and five part-time employees. Some will stay with Landmark once the sale closes, Dobbs said, while others will remain with CornerBank in its new location.
CornerBank did not disclose where its new branch would be located.