Paris-based Kentucky Bancshares Inc. expects final approval by the third quarter of this year for an acquisition of Richmond-based Madison Financial Corp., the parent company of Madison Bank.
“In our three-year strategic plan we have always, as part of that plan, been looking at potential growth in the markets that we operate in or are close to. This opportunity came up,” Kentucky Bank President Louis Prichard said.
Kentucky Bank already has a presence in Richmond, having opened a branch in February 2014 at 5008 Atwood Drive. The bank’s first Lexington branch opened in May 2013, completing expansion into Fayette and all surrounding counties.
“Richmond and Madison County are among the fastest-growing cities and counties in the state of Kentucky,” Prichard said. “Obviously, Eastern Kentucky University adds a lot to what’s going on there, and there’s a lot of business going on there.”
The acquisition also will add to Kentucky Bancshares shareholder value, giving them approximately $1 billion in total assets. Prichard said there are advantages to acquiring an existing institution, as opposed to opening a new branch, including an established customer base.
“They have a customer base already, they’re roughly $120 million in assets, and they’ve been around since 1998," Prichard said. “I think that bodes well for our
investment there.”
Madison Bank has three locations — University Banking Center at 660 University Shopping Center, Tates Creek Banking Center at 724 W. Main St. and Highland Park Banking Center at 1001 Gibson Bay Drive.
Although Prichard said Kentucky Bank is always looking for new expansion opportunities, the board of directors and senior management are also cognizant of the importance of remaining a community bank and keeping close relationships with customers, he said.
“We want to be careful about stretching our capital and human resources,” Prichard said.
According to the quarterly report for the first quarter of 2015, Kentucky Bancshares
Inc., Kentucky Bank’s parent holding company, assets totaled $856.5 million, an increase of 9.4 percent from March 31, 2014.
Total net loan balances increased nearly 14 percent and total deposit balances increased 5 percent. Total shareholders’ equity for the company increased $7.8 million, approximately 11 percent.
Final board approval and regulatory approval is expected in June, and locations will be open as Kentucky Bank branches in late July. Kentucky Bank has branches in Bourbon, Clark, Elliott, Fayette, Harrison, Jessamine, Madison, Rowan, Scott and Woodford counties.
Kentucky Bancshares Inc. is a publicly traded company, using the stock symbol KTYB. For more, visit www.kybank.com.