Sunflower Bank’s holding company plans to merge with a Denver-based bank holding company in a deal that bank officials said will create a $2.5 billion bank with branches in six states and an investment and trust business with $5.5 billion in managed assets.
Sunflower Financial Inc. said it signed a definitive merger agreement with First Western Financial Inc. Financial terms of the deal were not disclosed.
Sunflower Financial, based in Salina, has $1.7 billion in assets and owns Sunflower Bank, which has 35 offices in Kansas, Colorado and Missouri. It operates three offices in Wichita.
First Western has $648 million in assets through its First Western Trust Bank, which operates 10 offices in Arizona, California, Colorado and Wyoming. The company also has $4.8 billion of trust and investments managed by its First Western Capital Management business, which is based in Los Angeles.
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Mollie Hale Carter, Sunflower’s chairman and CEO, will serve as executive chairman of the merged holding company. Scott Wylie, chairman and CEO of First Western, will be the chairman and CEO of the bank and investment management subsidiary. Wylie also will be president and CEO of the holding company.
A Sunflower spokesman said officials have not yet decided on the name of the merged company. He also said the operations of the merged company’s headquarters would be divided between Salina and Denver.
“We’ll have people in both areas,” said Mark Grant, Sunflower’s senior vice president of corporate marketing. “That’s how we’re going to work it.”
Brad Elliott, chairman and CEO of Equity Bank who was Sunflower’s Wichita president in the early 2000s, said he thinks the deal is attractive to Sunflower largely because of First Western’s trust and investment business.
“I think it bolsters Sunflower’s ability to offer wealth management and retirement services,” Elliott said. “It might affect larger players in that space … other (banking) companies focused on retirement business.”
That’s what Chuck Marshall, a banking consultant at Kennedy and Coe, thinks, too.
“Banks generally merge to expand markets and to expand service offerings,” Marshall said. “On the surface, the great big trust department … looks to me like a great acquisition.”
Sunflower and First Western said in a joint news release Tuesday that the combined company’s fee income business would account for 40 percent of its revenue.
“Fees from other services are contributing more to the bottom line, so my guess would be that with a trust department of $4 billion, there’s a lot of trust income,” Marshall said. “That’s a real opportunity.”
Sunflower and First Western said the merger is expected to close in the first quarter of 2015, following shareholder and regulatory approval.