By Will Johnson
“As the present now will later be past. The order is rapidly fadin’. And the first one now will later be last. For the times they are a-changin’.” – Bob Dylan
GRAPELAND – While the details still have to be worked out, it appears as if Grapeland State Bank (GSB) may have new owners before the New Year.
“We have signed an agreement, subject to certain conditions, terms and things that need to be met, to sell the bank stock,” GSB President Ron Reed said on Tuesday, Aug. 7.
Asked what prompted the action, Reed said the bank was approached by a group of investors out of Dallas during the first part of 2018.
“It was not another bank,” he stressed. “They made a very reasonable offer that I, in my fiduciary responsibility, took to the board of directors to see if they were interested.”
Reed explained he had received numerous calls about possibly selling the bank “… but no one ever got serious about making an offer. We wanted to keep the bank independent for a long, long time. This offer we received earlier this year was a very, very good offer. As I said, I took it to the board and we agreed we should take the next step.”
The bank president went on to say an agreement was signed where if the bank met all the terms and conditions, it was possible the transaction could close by the end of 2018 or early 2019.
“We are still in the negotiation stage right now. It’s always possible this might not happen. It is a positive thing to the extent that the investing group is going to keep the bank just like it is. They will keep the name of Grapeland State Bank, if this thing comes together. We’re not changing the name. The staff is also going to remain the same,” Reed indicated.
The investment group is comprised of former bankers in the Dallas area who sold a fairly large bank approximately one year ago. At the time of the sale, the investors signed non-compete documents which have now expired, according to Reed.
“We announced this to the staff in the last couple of weeks,” he continued. “I’m sure word got out on the streets because I’ve been getting questions from customers. I have assured them it will be business as usual. They will be walking in here and dealing with the same employees.”
As to who the identity of the investors, Reed said he was not at liberty to say until a press release was issued “… hopefully by the middle of next week.”
When he brought the matter of a potential sale to the board, Reed said the reaction was “… very reserved. We discussed this for three months. We talked with some of the shareholders – discretely – and came back with the idea this may be the right thing to do at the time.”
New banking laws and an increase in government regulation of the banking industry also factored into the decision, Reed explained.
“What is happening to small banks all around the country is the amount of government regulation has increased. Consequently, our expenses have gone up. I have been here for five and a half years and our expenses have gone up substantially each year because of compliance. It is forcing a lot of other small banks that I know of to consider something like this to keep the entity viable,” he said.
It will be the best of both worlds, Reed said. The bank will keep the same name, the same great customer service and the same employees “… but the equity put into the bank will allow us to do bigger and better things. There will be more financial products offered and it will be a lot better situation for us, long-term.”
Will Johnson may be contacted via e-mail at firstname.lastname@example.org.