FROM ALL THE FUSS, YOU might think that Sutton State Bank was more important than BankAmerica Corp.
It is -- at least to business owners in Attica, Ohio, Sutton's home. Last July, a group of 16 Ohio investors purchased Sutton from Centran Corp., the Cleveland-based holding company that had bought the bank from another large company in 1972. They feared that the pending acquisition of Centran by a second holding company would fatally distance Sutton's decision making from the small farming community it served. So the local investors paid $2.8 million to restore Sutton's status as a community bank.
Such purchases are no longer unusual. Big banks continue to gobble up local lenders, but some towns are countering by buying back their local banks. They want to restore decision making to the local level, where it is usually more sensitive to community needs. Their goals: faster action, more loan money, and better services. "People are sick and tired of the depersonalized banking relations that megamergers and multiple acquisitions are bringing about," says Douglas V. Austin, chairman of the department of finance at the University of Toledo.
Business executives in Sanford, N.C., purchased a branch of a large regional bank and merged it into their newly founded First Carolina Bank. In the next four months, assets grew from $4.5 million to $7 million, and loan volume increased from $2.6 million to $3.5 million. "Our former owner's loan limits were very tight," says Ann Williams, a vice-president. "We're in control of our own decisions now; it's a new ball game."
The game is also played in Greenville, Mich., where 9 local shareholders are using a leveraged buyout to purchase Commercial Bank from the 150 current shareholders, who are scattered nationwide. And in Olean, N.Y., a group from neighboring Syracuse, N.Y., bought three branches of the Bank of New York in Olean, restoring its original name and installing local control. "I think we'll only see a few of these a year for a while," says Austin, "but only because local groups won't be able to get the money together right away. In about five years, we're going to see it happening all over."