ShoreBank Corp., known largely for serving Chicago's inner-city neighborhoods, is expanding into the suburbs.
The $1.9 billion-asset company announced Monday that it has a deal to acquire Greater Chicago Bank in Bellwood, Ill., for $15 million in cash, or 2.3 times its book value.
The acquisition would be ShoreBank's first in more than a decade and would give the company its first branches on the city's North Side and in the western suburbs. The $63 million-asset Greater Chicago has two branches in Bellwood, one in West Ridge, and one in Chicago.
The deal is very small, but "from an access standpoint, it gives us a reach to the entire Chicago western suburbs," said Anne Arvia, ShoreBank's president and chief executive officer.
Like ShoreBank, which has six branches and a loan production office in Chicago's African-American neighborhoods, Greater Chicago primarily targets minority groups. Bellwood and the North Side are made up largely of Hispanic and black neighborhoods, while West Ridge also has a large number of Asian immigrants.
ShoreBank also has branches in Cleveland and Detroit, and its ShoreBank Pacific subsidiary has one branch, in Ilwaco, Wash.
Also like ShoreBank, Greater Chicago is an active multifamily housing lender.
The deal "allows us to take what we do really well into new markets," Ms. Arvia said. "It also gives us access into the Latino market and the Asian market."
ShoreBank was also attracted to Greater Chicago for its low-cost deposits, she said. The bulk of Greater Chicago's $56 million of deposits are core ones, while ShoreBank has roughly $400 million of brokered deposits, according to first-quarter data from the Federal Deposit Insurance Corp.
"For larger community banks, funding is one of the biggest challenges, and any kind of core deposits are important to us," Ms. Arvia said.
ShoreBank's last acquisition was in 1995, when it bought the $275 million-asset Indecorp Inc. of Chicago for $30 million.
The deal for Greater Chicago is expected to close in the fourth quarter.
