Alliance Bank to absorb Capaha Bank for undisclosed sum

Two community banks have announced a merger planned to take effect in the spring.

Under a recently formed agreement, Alliance Bank's holding company, Alliance Bancshares Inc., headquartered in Cape Girardeau, will acquire Southern Illinois-based Tammcorp, which owns Capaha Bank.

Alliance Bank opened its first location in Cape Girardeau in 1997 and has branches in Sikeston, Missouri, and Oran, Missouri. Capaha Bank, which has six locations in Cape Girardeau and Jackson and in the Illinois cities of Anna, Cairo and Tamms, was originally founded as Tamms State Bank in 1955.

Capaha Bank's branches eventually will be given the Alliance Bank name, but not until after the two banks' computer systems are merged, which is still some time away, said Cord A. Polen, president and CEO of Alliance Bank.

Alliance Bank, according to a news release announcing the acquisition, proposed the merger unsolicited.

Polen said the reason Alliance wanted to acquire Capaha is twofold. "We've had a good working relationship with the management at Capaha for several years. We have shared best practices and we have some mutual customers. Over time, we've realized that culturally we are pretty similar and we work well together, so it was a natural fit," he said.

Polen also said new regulations put forth by the Consumer Finance Protection Bureau are influencing the merger.

"It's putting a much larger regulatory burden on community banks, so to help cover that additional overhead, it's going to make sense not only for us, but for other community banks to start looking to grow in size. The quickest, easiest way to do that is to start merging institutions," he said.

The financial terms of the merger have not been disclosed, though it is expected to result in a combined organization with nearly $350 million in consolidated assets, according to the release. As of Sept. 30, Alliance Bank's assets totaled $168 million and deposits were $145 million; Capaha Bank's assets were about $201 million, with deposits of about $181 million.

Boards of directors for both banks' holding companies already have approved the merger unanimously, leaving approval by shareholders of Tammcorp and banking regulatory authorities as the last step toward the merger. Polen said the closing of the merger agreement is expected in the spring.

Polen said customers of both banks will benefit from the acquisition because of the potential for expanded services. Alliance Bank, for example, will be able to offer the mobile banking services that exist only at Capaha Bank. Capaha Bank's customers also will be offered more services, he said.

John R. Abercrombie, president of Tammcorp and president and CEO of Capaha Bank, said in a news release the bank is excited about the partnership and anticipates "a successful combination and a seamless transition for our customers and employees."

eragan@semissourian.com

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