RelianzBank plans to sell to Arkansas City-based Union State Bank (VIDEO)

More than a year ago, David Harris said he and members of RelianzBank’s board of directors began discussing the $51 million bank’s strategic options.

Those options included buying another bank, merging with another bank, or selling to another bank, said Harris, RelianzBank chairman and CEO.

He and the board chose the third option.

On Tuesday, RelianzBank and Arkansas City-based Union State Bank announced that Docking Bancshares, Union State’s holding company, would acquire the bank that Harris started in December 2005.

Financial terms of the transaction were not disclosed.

Once the deal closes, which is expected in the second or third quarter of 2015 following regulatory approvals, RelianzBank’s office at 2327 N. Ridge will become the west Wichita branch of Union State.

“The critical thing for us was it became more and more challenging to grow organically, in part because of the difficulty of getting loan officers hired,” Harris said. “We truly did toy with all three (options). We just came to the conclusion as a shareholder group that we have to position ourselves for the future. … You cannot sit idle with all the headwinds, with all the challenges out there. It kind of goes back to if you’re not moving forward, you’re not growing. You’re kind of moving backwards.”

Harris’ business relationship with Union State goes back several years. It started when chairman Bill Docking invited Harris to lunch. That led to RelianzBank and Union State partnering on several loan deals.

Harris said he’s been through seven mergers in his banking career, and he’s seen first-hand how tough the integration is when two banks have vastly different cultures. Since Harris will remain post-merger as Union State’s Kansas regional president, “it’s important who I work for,” he said.

“Their culture, their style of doing business is just a great fit for me,” said Harris, who also will take a seat on Union State’s board of directors.

And the acquisition “offers us the ability to do larger deals, a lot more horsepower,” Harris said. “It will be a nice move for us.”

RelianzBank’s nine employees will join Union State following the acquisition.

A cultural fit “is important for us, too,” said Eric Kurtz, Union State CEO. “We want a transaction where people feel comfortable moving forward.”

Union State has $250 million in assets and branches in Arkansas City, Winfield and Udall.

It also has loan production offices in Wichita, at 10111 E. 21st, and in Bartlesville, Okla.

Kurtz said Union State will convert its east Wichita loan office to a full-service branch once the deal with RelianzBank closes.

“The east-side (Wichita office) has gone very well for us,” Kurtz said. “We felt it was important to continue the growth in Wichita.”

The acquisition is expected to boost Union State’s assets to more than $300 million.

“You put the two balance sheets together and that’s much stronger than one,” Docking said.

This story was originally published February 24, 2015 at 9:59 AM with the headline "RelianzBank plans to sell to Arkansas City-based Union State Bank (VIDEO)."