Great Western Bank has big plans for Eastern Iowa

Great Western Bank plans to expand into Eastern Iowa this summer with the purchase of a North Liberty banking facility and a bank acquisition.

Liberty Bank has agreed to sell its North Liberty branch real estate at 655 Community Drive to Great Western in May pending regulatory approvals, according to Bart Floyd, Iowa City market president for Great Western.

The name of the bank involved in the pending acquisition cannot yet be closed under terms of the deal, Floyd said. It has nine offices in Iowa, including three in Eastern Iowa.

Great Western hopes to open the North Liberty office in June, and expects to complete the bank acquisition in July, Floyd said.

Sioux Falls, S.D.-based Great Western Bank, with 200 offices in six states, is a subsidiary of National Australia Bank. It has 40 Iowa branches, but none located further east than Grinnell.

Floyd said Great Western Bank prides itself on offering the flexibility of a small bank and the financial strength and lending capabilities of a larger bank. Great Western Bank opoened a loan production office in January at 209 E. Washington St. Suite 209, Iowa City.

"The company has aggressive growth plans, and over the next few years will probably fill out Eastern Iowa and move into Illinois and Wisconsin," Floyd said.

The growth could lead to about 10 branches in Eastern Iowa over the next few years, he added. Great Western Bank will have over $9 billion in assets when the pending bank acquisition is completed, according to Doug Bass, regional president in Des Moines.>

Liberty Bank's branch in North Liberty is being closed as part of a planned reorganization to boost the bank's core capital in order to meet regulatory requirements, company President John Rathjen said. The bank's ability to meet capital requirements was strained by heavy real estate and development loan losses during the recession, primarily in Florida and the Des Moines metro area.

Liberty Bank closed its downtown Iowa City branch in December as part of the same reorganization, and is working with the landlord to lease the space at 14 S. Clinton St. to another tenant.

Customer accounts at the North Liberty Branch will be transferred to Liberty Bank's Coralville branch at 119 2nd St., No. 100, Rathjen said.

Rathjen said Liberty Bank is also entering agreements to sell branches in Iowa Falls and Granger, after earlier sales of branches in Council Bluffs, Spirit Lake, Arnolds Park, Garner and Klemme.

Selling off the branches frees up capital and reduces operating expenses, Rathjen said, while also reducing the amount of capital the bank is required to have.

Floyd said Liberty Bank's closing plan worked out well for Great Western, because it is near the busy intersection of Highway 965 and Penn Street, and easily accessible to both the Cedar Rapids-Marion and Iowa City-Coralville markets.