Two century-old community banks in Illinois will soon merge in a deal valued at $12.3 million, the businesses announced Wednesday.
First Waterloo Bancshares Inc. plans to acquire Collinsville-based Best Hometown Bancorp Inc. in a deal expected to close in the first quarter of 2020.
“We always say we’re looking for opportunities to expand our franchise,” said Gary Hemmer, president and CEO of First National Bank of Waterloo and its parent company, First Waterloo Bancshares Inc.
As of Sept. 30, there were over 826,000 shares of Best Hometown Bancorp outstanding. Shareholders will receive $14.89 per share.
First National Bank of Waterloo has 115 employees and 11 banking centers in central and southern Illinois, and is based in Waterloo. Locations in Stewardson and Effingham are the result of a 2015 acquisition.
Best Hometown Bank has 22 employees and two banking centers, in Collinsville and Maryville.
Hemmer said the deal with Best Hometown made strategic sense, because First National Bank of Waterloo is established in Monroe and St. Clair counties, and Madison County was “the next logical extension.”
Hemmer said his company plans to keep Best Hometown Bank’s locations.
The acquisition will be a great benefit to Best Hometown Bank, its staff, its customers and its shareholders, said Ron Shambaugh, president and CEO of the bank and its parent company, Best Hometown Bancorp Inc.
Shambaugh said that technology has changed the banking industry drastically, from the way it handles information to the way it does marketing and interacts with its customers.
It has also made some things more difficult for smaller banks, he said, citing as an example increased fraud and security precautions that are a necessity.
Best Hometown Bank was established in 1887, and was known as Home Federal Savings & Loan until 2016. The bank had $115 million in total assets as of Sept. 30.
The First National Bank of Waterloo was established in 1912. It began with under $27,000 in total deposits, and currently has approximately $485 million in assets.
The acquisition still needs approval from regulators and Best Hometown Bancorp shareholders.