After closing its first acquisition of the year last week, Kentucky's CBT Corp. has set its sights on expanding into the western part of the state as well as into parts of Illinois, Missouri, and Tennessee.
The Paducah-based holding company is targeting banks within a 100-mile radius, said William J. Jones, its president and chief executive officer.
CBT wants to bulk up to $1 billion in the near term. Last week's acquisition of BMC brings it $210 million of assets, for a total of $818 million.
CBT paid $48.4 million for the Benton, Ky.-based company. Under terms of the agreement, shareholders of BMC will receive two shares of CBT common stock for each share of BMC common stock.
CBT, which has 18 branches, controls two banks and a credit corporation. One of the banks, Pennyrile Bancshares of Hopkinsville, was bought in November 1993.
BMC operates three banks in the western reaches of the state.
The BMC merger gives the company a hold in "five dominant markets of western Kentucky," Mr. Jones said.
"They're markets that we know, and there's a lot of stability to western Kentucky," he said. "They just happen to fit into the geographic area which we have targeted as the next leg of our corporate expansion."
CBT has been a solid performer over the years. For the first three months of the year, the company earned $2.1 million, or 77 cents a share. The company reported a return on average total assets of 1.44% and a return on average equity of 12.70%. The bank had just 0.26% of its loans listed as nonperforming.
Mr. Jones cautioned that the company isn't growing for growth's sake.
"We happen to believe we're a performance-driven organization," he said.
Trying to Diversify
Mr. Jones defined CBT's mission as becoming a diversified financial services company that provides a strong return to its shareholders.
But CBT doesn't plan to restrict itself to banking.
"Our objective is to generate an above-average return for our stockholders by being a diversified stockholding company," Mr. Jones said.
The company is hoping the state's law against banks owning insurance companies will be loosened, allowing it to sell auto, health, home, and life insurance.
"We happen to believe its part of the total relationship of our customers," he said.
