CHAMPAIGN – The parent companies of Busey Bank and Main Street Bank & Trust plan to combine in what's being called a "merger of equals."
The resulting company will be called First Busey Corp., and the resulting bank will be known as Busey Bank, with its headquarters at 100 W. University Ave., C, the chairmen of both local banking-based companies said today.
If approved by regulators, the merger will create one of the largest banks based in downstate Illinois, with assets of about $4.1 billion and more than 50 offices in central Illinois, Indianapolis and Florida. The companies estimate they would have more than 40 percent of Champaign County's banking deposits.
Altogether, Urbana-based First Busey Corp. and Champaign-based Main Street Trust Inc. employ nearly 1,000 people.
Employees were notified of the merger plans this morning by e-mail and in meetings.
In an interview this morning, First Busey Chairman Douglas C. Mills said the two banking companies have held discussions off and on over the past 10 years. The recent round of discussions began last fall and accelerated in the spring.
"We started to take a good look last fall and agreed to get year-end figures and take a look at everything about March 1," he said.
On March 29, a representative of an investment banking firm made a presentation to the First Busey board, and there were "lots of compelling reasons to move ahead," Mills said.
The key question, Mills said, was whether a merger would be in the best interest of shareholders, employees and the community, and both institutions agreed it was.
Under the merger plans, Mills would remain chairman of First Busey until the 2009 annual meeting when Gregory B. Lykins, chairman of Main Street Trust, is expected to succeed him. Lykins and Edwin A. Scharlau II would be vice chairmen of the company, and Van A. Dukeman would be president and chief executive officer.
Dukeman would also serve as chairman of Busey Bank, with Lee O'Neill becoming the bank's president and chief executive officer. P. David Kuhl, the chairman and chief executive officer of Busey Bank, has resigned his officer positions. His wife, Barbara Kuhl, stepped down from her post at First Busey earlier this year.
Mills' son, David D. Mills – currently president of Busey Bank – will become responsible for First Busey's Florida operations and will also work on merger and acquisition projects, Dukeman said.
Leaders of both companies acknowledged there would be overlap in some markets, particularly Champaign County, but downplayed the chance of many job reductions, other than natural attrition.
"We're going to continue to grow. There will be lots of opportunities," Doug Mills said.
Under the merger agreement, Main Street Trust shareholders will receive 1.55 shares of First Busey common stock for each share of Main Street Trust stock. The company will continue to trade under the BUSE symbol on the Nasdaq Global Select Market.
Plans call for Main Street's Wealth Management Division to merge with First Busey subsidiary Busey Investment Group under the latter's name.
Together, those organizations have about $4.5 billion in assets under care and manage more than 100,000 acres of farmland.
Curt Anderson, the current president of Busey Investment Group, and Donna Greene, president of Main Street's Wealth Management Division, will be co-managing directors of that organization.
The combination accomplishes Mills' longtime dream of uniting his company with one of the major banks in downtown Champaign. At one time, he envisioned merging with either BankIllinois or Champaign National Bank. Instead, those two banks merged and later adopted the Main Street name.
Main Street's Dukeman said there was little question about what name would be adopted in the newly announced merger.
"The Main Street name has been around since the fall of 2004. The Busey name has been around since 1868. It makes sense the resultant bank would be Busey. You pick the best retail brand," Dukeman said.
Lykins added that the Busey name "made perfect sense."
In a way, the combination reunites many of the people who helped build Busey Bank during the 1970s and 1980s.
Both Lykins and Dukeman were high-ranking officers of Busey until they left to help orchestrate the merger of BankIllinois and Champaign National Bank into what would become Main Street Bank & Trust. Greene also worked for Busey before joining Main Street Trust.
Mills said the timing of the merger was unrelated to the death of his wife, Linda, last Thursday after an extended battle with breast cancer. Indeed, he said, he had expected Linda to live to see the announcement.
The merger, approved Wednesday by both companies' boards of directors, had been scheduled to be announced Monday. But the announcement was pushed back to today to accommodate Mrs. Mills' funeral.
Mills said he hopes shareholders will vote on the merger later this year, with the companies expected to combine in the second quarter of 2007. The merger plan must pass muster from the Federal Reserve, the Securities & Exchange Commission and state banking regulators.
Mills and Dukeman said the companies plan to continue their civic involvement at levels equal to or greater than the sum of what they both do now.
Dukeman said the merger also ensures local control for both institutions.
"It helps ensure there's going to be a local, independent decision-making banking company here in Illinois," he said.