Two small Kansas banks that have been fixtures in their rural communities for decades are planning to merge in a bid to improve efficiency and better contend with increasing compliance costs.
First National Bank of Wellington and Caldwell State Bank have told their customers that they plan to combine their banks sometime in the spring under a new name, Impact Bank, the Wichita Business Journal reported Wednesday.
First National Bank of Wellington, with $91 million of assets, was founded in 1879 and the $40 million-asset Caldwell opened for business in 1928. The banks, which each have just one branch, are located about 27 miles apart.
The banks have been friendly rivals for decades and even share many of the same board members. In a letter to customers, they said that a merger would allow the banks to offer more services and larger loans while spreading out compliance costs over a larger asset base.
"There's substantial savings by combining the two banks and that's something we can pass on to our shareholders and to our customers," Leo Schlitz, Caldwell's president and chief executive, told the Business Journal.
Under terms of the merger agreement, First National's holding company will acquire Caldwell, merge it into its bank and rename it Impact Bank. The banks did not disclose a deal price.