Mike Sterkel, the president of Gold Bank’s Oklahoma City branch, saw the writing on the wall two years ago and did not like the message.
He knew the $4.3 billion-asset Gold Banc Corp. Inc., of Leawood, Kan., planned to sell its operations in slower-growing markets, which included his area.
So Mr. Sterkel called Ross McKnight, the chairman of the $500 million-asset Olney Bancshares of Texas Inc., and asked if he would be interested in buying the Oklahoma City branch and the four Gold branches closest to it, which were mostly in rural areas.
“I tried to find a strategy that allowed me to keep my management team together,” Mr. Sterkel said. “I knew … [Mr. McKnight] had the desire to enter the Oklahoma market, and he had the ability to acquire a portion of Gold Banc’s holding in Oklahoma.”
The idea was put aside when it looked like Silver Acquisition Corp. would buy Gold Banc in its entirety, but Mr. Sterkel and Mr. McKnight revived their plan after that deal collapsed in October.
The result was a deal, announced Wednesday, that calls for Olney to pay Gold a $34 million premium for the five branches, in Oklahoma City, El Reno, Kingfisher, Hennessey, and Enid. They have about $349 million of deposits and $343 million of loans.
Gold would continue to operate its three remaining Oklahoma branches, in Tulsa, and keep all the equity and unallocated loan-loss reserves, said Rick J. Tremblay, its chief financial officer.
The deal would help Gold execute its long-term strategy to leave slower-growth markets and expand operations in metropolitan areas like Tulsa, Kansas City, Kan., and the Florida markets of Tampa and Sarasota-Bradenton, Mr. Tremblay said.
Over the next three years Gold plans to use proceeds from the sale to help finance nine branches on Florida’s west coast and five to six in Johnson County, Kan., he said. Gold has 32 branches, excluding the five involved in the deal.
John Bergquist, an analyst with Sandler O’Neill & Partners LP in Chicago, said the deal would benefit Gold, as long as it uses the capital quickly. “They need to put the capital to work through branch expansion or branch purchases and get those branches to reasonable profitability levels rather quickly.”
The sale would take roughly five months to close, because Olney plans to charter a bank in Oklahoma. Mr. Sterkel proposed the idea of a separate bank, and Mr. McKnight agreed. Both said an Oklahoma charter would provide a local identity — a plus when trying to get new business.
Mr. Sterkel would be the chief executive officer of the bank, which has not been named yet.
For Mr. McKnight, this is a chance to expand Olney’s operations into a state to which he has long had personal ties. He, his wife, and their two children are all graduates of Oklahoma State University in Stillwater.
“Even though we are from Texas, we’ve had a lot of friends and family there over the years,” Mr. McKnight said.
