The merger of equals between S.B.C.P. Bancorp Inc. and Monona Bankshares Inc. aims to create a yet-to-be-named bank that will be major player in the Madison, Wis. area, executives at both companies said in interviews.
The deal will create sixth-largest bank in Wisconsin and the largest bank in Dane County, with almost $3 billion in total assets, the companies said.
Monona President and CEO Paul Hoffmann and Jim Tubbs, president and CEO of S.B.C.P subsidiary State Bank of Cross Plains, said the deal was attractive because of the similar size and culture of the companies, as well as their complementary geography: Monona has more branch coverage in the eastern side of Dane County, while S.B.C.P. is more centered on the western side.
"We wanted to build a bank that fits the Madison marketplace and can be a little bit larger so we can take advantage of economies of scale for things like technology, attract top talent, and really kind of increase our geographical footprint," Hoffmann said. The executives have known each other for roughly 15 years, and Tubbs said discussions of a deal began roughly 11 months ago.
Hoffmann said the companies want to build a platform that allows for further expansion, especially in southern Wisconsin.
The transaction is the second U.S. community bank merger of equals in the first three months of 2022, following two in the space in all of 2021.
Hoffmann and Tubbs said a merger of equals was always their goal, and they worked from the outset to overcome the social issues that can make or break such deals. Tubbs will be CEO of the combined bank, while Hoffmann will take on the role of president. Company executives will mostly work from S.B.C.P's current office, while the combined bank's chartered headquarters will be at Monona's current office.
In other key personnel decisions, Monona Chief Lending Officer Arlyn Steffenson will remain in that role, as will Monona CFO Tim Ryan and Monona Chief Credit Officer Pete Graven. State Bank of Cross Plains' chief lending officer, Scott Ducke, will serve as COO and executive vice president, while the bank's CFO, Sue Loken, will become chief strategy officer, with oversight that includes future M&A.
Several hurdles remain. Because the banks use different core processing systems, "One of the customer bases will have an element of disruption integrating to a new core processor, so our focal point will be how we mitigate that disruption," Tubbs said.
The banks' leaders also have not settled on a name for the combined company. The CEOs declined to disclose any top contenders, but said they will reach a decision in the next three to four months.
"We do have some good leading candidates, we just have to figure out now if they can be trademarked and how they're going to play with our customer base," Hoffmann said.
