By Becky Yerak | It’s easier to buy an existing bank than to start a new one.

Several backers of Premier Commerce Bank — which was originally
supposed to be a new bank in Downers Grove — have instead decided to
buy a $35.2 million-asset institution in LaSalle County and use that as
a springboard for eventually expanding in the Chicago area.

In early February, the original backers of Premier Commerce Bank withdrew a 2008 application seeking a permit to organize a bank in Downers Grove. It was the third Chicago-area startup lender since late December to stop pursuing a bank charter.

Now Premier Commerce Bancorp of Palos Hills has applied with the Federal Reserve to become a bank holding company so it can buy all of the voting shares of G.R. Bancorp Ltd. of Grand Ridge, Ill., which is in LaSalle County. G.R. is the parent of First National Bank of Grand Ridge.

“We’ve signed a definitive agreement,” said Mark Scheffers, Premier chief executive. He’s former group senior vice president of business banking at LaSalle Bank.

So why did Premier scrap plans to start as a new bank?

“Things were just going too slow,” said Scheffers, whose group was going to raise $13 million to get the bank off the ground. “Capital wasn’t an issue for us; it was really just the fact that there was no definitive timeline for completing the regulatory process for a charter, and we just made the decision that it wasn’t in our interest to continue.”

Just 20 new U.S. banks were launched in 2009, the fewest since the savings and loan crisis, according to SNL Financial. Regulators are warier of awarding new charters, and the economy makes it tougher to raise money to start banks.

“Alternatively, a group was formed with some of the same players” that decided to look for acquisitions, he said. “The environment for acquisitions became much more attractive during that timeline as well.”

Premier probably looked at 100 banks statewide, he said. “Ultimately it came down to this being a very attractive acquisition target for us. It’s 100 years old, has strong liquidity, doesn’t have the loan problems typical to many banks, and has a good foundation to grow and expand throughout the greater Chicago area,” he said. “We’ll position it both for organic growth and acquisitions.”

The bank, established in 1903, made $244,000 last year, up from $191,000 in 2008. Only 1.8 percent of its loans are seriously delinquent.

G.R. is owned by private investors. “One of the key majority shareholders is Mike White. He’s the CEO” of the parent, Scheffers said. “His father had passed away a couple of years ago, so his father’s estate owns the controlling shares.”

The Premier Commerce group has initially invested more than $8 million in the Grand Ridge bank and might invest more. Its group consists of more than 100 investors, mostly Chicago-area small to mid-size business owners and professionals.

“Each of our current individual investors generally invested between $50,000 and $525,000,” Scheffers said.

Gerald Johnson, the existing bank president, is expected to stay on as president.  Scheffers will continue as chairman and CEO of Premier Commerce Bancorp, and it’s likely he’ll become CEO of the bank.

It’s also likely that James Xeros will be added to the bank team as a commercial banking executive. Xeros also previously worked at LaSalle/ Bank of America, most recently as senior vice president. Xeros is also a significant investor in Premier Commerce Bancorp.

George Parhas is one of Premier’s independent directors and another significant investor.  Parhas is owner of Parhas CPAs.

“He was previously one of the founders and bank directors at Cambridge Bank, which was sold in 2006 to Inland Bank for over a 500 percent 10-year return to its original investors,” Scheffers said. Parhas “was also previously  a good source of commercial referrals to us at LaSalle Bank.”   

Premier expects to keep the Grand Ridge name in its current community, but any expansion will potentially be branded with the Premier Commerce name.