The former head of a big Chicago community bank is hoping to start a network of community banks in the suburbs.
In May 1994, Charles Bruning sold $534 million-asset EdgeMark Financial Corp. for $62 million of stock to Old Kent Financial Corp. of Grand Rapids, Mich.
Now he is chairman and chief executive of Amerimark Financial Corp., set up last May by a group of former EdgeMark investors. And this week Amerimark made its first purchase, paying $9.8 million in cash for $49 million-asset Duco Bancshares of Villa Park, Ill.
Mr. Bruning, the founder and former chairman of the American Bankers Association's Community Bankers Council, is seeking to take advantage of the abundance of small banks in the area and customer dissatisfaction with industry consolidation.
"We are happy to be back in community banking," said Mr. Bruning, who had been Edgemark's president and chief executive. "We will focus our efforts on building a network of banking organizations in the western suburbs."
With consolidation in full swing, a growing number of investor groups are forming corporations like Amerimark for the sole purpose of investing in or acquiring small community banks and boosting their earnings potential.
The groups-which include James Dierberg's First Banks Inc. of St. Louis; Oak Park, Ill.-based FBOP Corp.; and Dartmouth Capital Group-have been most active in the Midwest and California, which have many small community banks.
Mr. Bruning said his new company will target small and midsize businesses and professionals and will offer "highly personalized service, convenience, and specialized attention."
"In our perception, there's a disenfranchisement of customers, particularly small businesses and professionals," he said. "They've lost the personal attention that they like."
Duco, whose purchase Amerimark announced Monday, is the parent of Bank of Illinois and Banill Corp., a nonbank subsidiary formed to work out nonperforming assets as well as hold some performing loans.
Amerimark paid about 1.7 times Dec. 31 book value, and 17 times earnings. The final price could be reduced, however, depending on the amount of capital received from Banill and other post-closing factors, Mr. Bruning noted.
Robert C. Iorii Sr., former vice president of an EdgeMark subsidiary and a former division vice president at Old Kent, will become president and chief executive of the bank.
And Mr. Bruning and his associates are nowhere near done. "This was our first acquisition," Mr. Bruning emphasized. "We will make others." He said the company already has contracts to buy two more branches, but he declined to give details.
Amerimark has other acquisition targets in mind, Mr. Bruning added. It has held preliminary discussions with other community banks, he said, and might also want to buy branches that Chicago regionals such as LaSalle National Corp., First Chicago NBD Corp., and Harris Bankcorp might put up for sale.
Mr. Bruning had led Edgemark for 19 years, but he is only 51. "I started out at 30," he said. "I'm a young guy."