It's open season on community banks in Kansas.
Ever since the state ligislature voted to open its borders to interstate banking last year, there has been a rush to acquire the state's small banks..
Big banks from Missouri are hopping the Missouri River to get a foothold in the Sunflower State. Kansas-based banks have joined the fray. And the takeover rate is accelerating.
"There is a lot of activity and it's going to grow," said Jerry Swords, president of Swords Associates Inc., a bank consulting firm in Kansas City, Mo. "There was almost immediate response, especially from the Kansas City-based holding companies, to get into the market. They went right after it."
In the first quarter alone, 10 acquisitions were made, with assets totaling $1.3 billion.. That's up from six deals, totaling $316 million in assets, during the fourth quarter.
The most prolific of the acquirers have been Kansas City, Mo.-based Commerce Bancshares Inc., and Wichita-based Fourth Financial Corp., according to Cates Bank Rating Service, a division of Ferguson & Co.
Commerce, with $7.5 billion in assets, snapped up two Kansas banks in the fourth quarter. The larger one had assets of just $29 million. In the first quarter, it acquired a $72-million-asset bank.
Fourth Financial, a $5.6-billion-assets company,grabbed two Kansas banks in the fourth quarter and a third in the first quarter with assets totaling $287 million.
The biggest deal so far has been St. Louis-based Mercantile Bancorp Inc.'s acquisition of Midamerican Corp., an $811-million-assets bank.
In May, Boatmen's Bancshares of St. Louis said it would enter Kansas by acquire $1185-million-asset First Continental Bank and Trust of Overland Park in Johnson County -- suburban Kansas City. The transaction price was $25 million, plus $2 million in debt assumption.
"If you are going to branch, it makes sense to branch next door," said a Boatmen's spokesman, who declined to comment on whether it would look to acquire more Kansas banks.
Mr. Swords says that out-of-state banks want to be in Kansas because it has several growing areas. For example, Johnson County is seeing residential growth and has attracted shopping centers and office buildings.
"They all want in there," said Mr. Swords..
He expects the banks to target other markets, including the university towns Lawrence and Manhattan. !!!BEGIN TABLE Prairie Fire Five largest acquisitions in Kansas during the first quarterAcquired company/ Assetsacquirer (millions)Midamerican Corp. $811Mercantile Bancorp. 9,476Johnson City Bancshares $218Mercantile Bancorp. 9,476Southgate Banking Corp. $79Fourth Financial Corp. 5,613Farmers Bancshares $55United Missouri 4,598
BancsharesManufacturers Bancorp $72Commerce Bancshares 7,541
Source: Cates Bank Rating Service !!!END TABLE