Commerce Bancshares Inc. of Kansas City, Mo., announced a $29.5 million deal Tuesday to buy the privately held Commerce Bank in Aurora, Colo.
The $15.2 billion-asset buyer, which has about 360 branches in Missouri, Kansas, Illinois, and Oklahoma, is paying cash for the $97 million-asset Commerce Bank, the sole banking subsidiary of Commerce Bankshares Inc. of Aurora.
The deal is the fourth in the past 12 months for Commerce of Missouri and would bring it into Colorado, a fast-growing state that has become popular with acquirers. Recent buyers there include U.S. Bancorp, which bought Vail Banks Inc., and UMB Financial Corp. of Kansas City, which bought Mountain States Bancorp.
Late last month Commerce of Missouri closed its $26.2 million stock deal to buy the $124 million-asset South Tulsa Financial Corp., giving it two full-service branches in Tulsa. In July, Commerce Bancshares paid $31 million for a majority of the assets of the $162 million-asset Boone National Savings and Loan Association in Columbia, Mo., and in September it spent $80.9 million for the $447 million-asset West Pointe Bancorp Inc. in Belleville, Ill., southeast of St. Louis.
Commerce of Missouri had not made a deal since 2003.
"In some of the more attractive adjacent markets, we want to have a physical presence to project our commercial expertise," David Kemper, the chairman, president, and chief executive of Commerce of Missouri, said in an interview Tuesday. "This is the most sensible way: to build off a small, well-connected bank. We think it's a cost-effective way to get into the market."
Mr. Kemper, 56, said the South Tulsa acquisition is another example of his strategy. "This is just a continuation of what we have been doing about how we can expand our regional commercial business."
Income for its commercial business, which provides corporate lending and cash management services, jumped 10.2% last year, to $148 million.
Buying Commerce of Colorado would add $70 million of loans and $75.5 million of deposits.
In a presentation to investors in late January, Commerce of Missouri said it may expand in markets like Nashville, Cincinnati, Des Moines, and Denver.
"We're still looking very opportunistically at those markets," Kevin Barth, who heads the company's commercial line of business and oversaw the Colorado deal, said in an interview Tuesday. "This is part of a 10-year strategy we've had to begin to do commercial business in contiguous markets and then slowly but surely begin to make some small strategic acquisitions that would allow us to have a physical presence and to expand those commercial relationships."
Commerce of Missouri had been "fairly aggressively pursuing Commerce in Denver for the past three years, trying to convince them to become part of us," Mr. Barth said.
Jim Lewien, 61, would remain the president and CEO of the Colorado bank.
"We have been approached by many organizations over the years," he said in an interview. "This is the right time to take this step to ally ourselves with a company that has a very robust array of products for businesses and consumers."
The deal is expected to close this summer.
