CHAMPAIGN – Two investors from the Chicago area have agreed to acquire a controlling interest in Champaign-based Strategic Capital Bancorp.
Gary Svec, a former chief financial officer of Chicago-based PrivateBank, and John Gorman, a director of that bank, plan to buy about 80 percent of Strategic Capital shares for a little less than $25 million, Svec said Friday.
"We believe the private banking niche is really the future for banks," Svec said, explaining his interest in Strategic Capital. "We feel strongly about the personnel in place and the clientele in the Champaign-Urbana area."
The deal has been approved by the Strategic Capital board but has yet to be ratified by shareholders and state and federal regulators. A shareholder vote is expected later this month.
Svec said Strategic Capital would retain its name and virtually all staff would remain. Svec would become chief executive officer of the holding company, and the current CEO, Steve Hillard, would step down.
Svec, 37, pledged to be "a frequent face in Champaign," even though he intends to keep his residence in Naperville. Gorman, whom Svec called his "mentor," would serve as a director and continue to live in Hinsdale, Florida and Hawaii.
Strategic Capital Bancorp, at 1608 Broadmoor Drive, is the parent company for Strategic Capital Bank and Strategic Capital Trust. The bank has about $190 million in assets, while the trust company manages about $355 million in assets.
Paul Ruedi, one of the co-founders of the firm in 1987, said he would continue to be a minority shareholder but plans to increase his holdings. Ruedi is president of the trust company and chief investment officer of the holding company.
His brother, John Ruedi, is senior vice president of Strategic Capital Bancorp and also is expected to take a minority interest in the company.
Hillard said Strategic Capital Bancorp has slightly more than 100 shareholders, most of them in Champaign County. The company has 27 employees, 10 of them on the wealth management/trust side and 17 of them on the executive staff or in bank operations.
Svec, a native of Cicero, received a bachelor's degree in accounting from DePaul University and then worked for the Crowe Chizek accounting firm. Later, he joined an investment firm that taught banks about asset-liability management. A client, PrivateBank, hired him as chief financial officer in 2000. He resigned from that job in early 2003 and was hired as a consultant to Strategic Capital in the spring.
"That led him a little over a month ago to present an offer to our board, and our board looked favorably on it," Hillard said Friday.
Svec said he became acquainted with Strategic Capital when he met co-founders Paul Ruedi and David Sinow about three years ago. Sinow is no longer with the firm.
Paul Ruedi said he expects Svec to expand on Strategic Capital's record of growth.
Ruedi said banks must maintain capital equal to at least 6 percent of assets to be a well-capitalized bank. Because Strategic Capital's assets have been growing fast, the bank is "bumping" into the capital requirement much sooner than expected.
Ruedi said it's not as easy for banks to get capital from investors these days. He noted Svec and Gorman's offer was particularly welcome because some shareholders are "at the age where they need or desire liquidity."
The transaction is subject to approval from the Illinois Office of Banks and Real Estate and the Federal Deposit Insurance Corp.
You can reach Don Dodson at (217) 351-5227 or via e-mail at firstname.lastname@example.org.