Central Bancshares in Muscatine, Iowa, plans to consolidate three of its bank subsidiaries under one charter.
The three Iowa banks will be reorganized under a new name once the Iowa Division of Banking and the Federal Reserve approve the consolidation, the Iowa City Press-Citizen reported Wednesday. The $725 million-asset company hopes to receive approval within three months and complete the consolidation by this summer. Management has not yet decided on the company's new name.
The three banks are the West Chester Savings Bank in Washington, with $51 million of assets; the Freedom Security Bank in Coralville, with $79 million of assets; and the Central State Bank in Muscatine, with $320 million of assets. The three banks have eight branches, all in Iowa.
The move will reduce Central Bancshares' regulatory costs and will give its customers more banking options.
"With three standalone banks, you have to have a lot of things done a certain way just because that bank has its own charter," Dan Uphoff, president and chief executive of Coralville Freedom Security Bank, told the Iowa City Press-Citizen. "You wind up doing a lot of duplicate, repetitive things that take away from the time staff would otherwise have to develop business and provide hands-on customer service. With the merger of banks, those types of overlapping administrative processes go away."
Central Bancshares' Illinois bank subsidiary, the $275 million-asset Farmers & Mechanics Bank in Galesburg, will retain its name and charter.