Associated Banc-Corp of Green Bay, Wis., has reached its second deal in recent weeks to sell some of its branches in Illinois.
The $225.4 million-asset F&M Bank, a unit of Central Bancshares Inc. of Muscatine, Iowa, has agreed to assume all of the accounts at Associated branches on East Main Street and North Henderson Street in Galesburg, Ill. This includes roughly $66 million in deposits and $18 million in loans, F&M Bank said on Monday.
Facing reduced revenue because of new caps on interchange fees, the $22 billion-asset Associated said in December that it would close 21 branches this year, including three in Illinois. The bank also said in late January that it would sell the deposit accounts and certain loans of at a branch in Quincy, Ill., to Town and Country Bank.
Associated's chief executive, Philip B. Flynn, had warned last fall that increased mortgage financing activity would help but that more steps were necessary to offset the hits to revenue.
Associated reported last month fourth-quarter income of $39.8 million, nearly six times higher than a year earlier, because of improved credit quality and loan growth.
F&M Bank, which is based in Galesburg, expects to retain the Associated employees from both branches but will likely close the branch on East Main Street and consolidate it into a nearby F&M Bank branch, Greg Kistler, president and chief executive of $656 million-asset Central Bancshares.
With the deal, F&M Bank will have roughly $143 million in loans, $250 million in deposits and five branches. The financial terms of the deal, which is expected to close in the second quarter, were not disclosed.