PARIS – Edgar County Banc Shares has completed its acquisition of First National Bank of Gilman, the Paris-based company announced this week.
The Gilman-based bank, which also has an office in Watseka, will become part of Edgar County Bank & Trust, and those two offices will be known as the Gilman Bank and Watseka Bank divisions of the Paris-based bank.
Dale Warmbir, president of the Gilman bank, will join the management team of Edgar County Bank & Trust.
The value of the transaction was not disclosed, but Edgar County Bank & Trust President Eric Volkmann said it was an all-cash arrangement.
The Gilman bank agreed to the acquisition in August, and officials of the Paris bank hoped it would be complete by October. State regulators, the Federal Reserve and the Federal Deposit Insurance Corp. had to approve the deal, but it took longer than expected because Edgar County Banc Shares had to satisfy a cross-guarantee lien by the FDIC against the Gilman bank, Volkmann said.
The lien resulted from the FDIC putting the John Warner Bank in Clinton in receivership in July. That bank shared some common owners with the Gilman bank.
The Gilman bank was one of three area banks in which the Campbell family held an interest. Several of the family's other banks – including the John Warner Bank and First National Bank in Danville – went into receivership and were later taken over by other banks. But the Gilman bank did not go into receivership.
Volkmann said the acquisition would result in a "temporary drop" in the Paris bank's core capital ratio. But he said the bank is projected to produce net income of $2.9 million to $3.3 million this year.
Edgar County Bank & Trust had $250.8 million in assets as of Sept. 30, while First National Bank of Gilman had $38.8 million in assets, according to the banks' respective call reports.
Edgar County Bank & Trust reported $2.3 million in net income for the nine months that ended Sept. 30.
In contrast, the Gilman bank posted a net loss of $1.7 million, largely as the result of realized losses on available-for-sale securities.
The Gilman bank remained undercapitalized by Federal Deposit Insurance Corp. standards as of Sept. 30. But several of the bank's capital ratios improved from June 30.
In addition to the two new offices, Edgar County Bank & Trust has offices in Paris, Kansas, Brocton and Ashmore, as well as Prospect Bank in Champaign, which is considered a division of the bank.
Though Prospect Bank opened only last December, it already had $22 million in deposits by midyear and is expected to have $40 million in deposits by year's end, Volkmann said, attributing the gain to the bank's veteran staff.
Volkmann said Edgar County Bank & Trust's strategy is to pursue both "organic and acquisitional" growth in the territory between Edgar County and Iroquois County.
He said the Gilman bank is the second major acquisition this year, following the Sept. 30 acquisition of a trust department from Citizens National Bank of Paris.