MainSource growing through acquisition, earnings

The $4.6 billion holding company for MainSource Bank, Greensburg, Ind., picked up FCB Bancorp, Inc., the holding company for The First Capital Bank of Kentucky, Louisville, Ky., as well as Capstone Investment Management, LLC, Greenwood, Ind.

MainSource Financial Group, Inc., a $4.6 billion holding company for MainSource Bank, Greensburg, Ind., has seen a lot of growth in the last few months. Some of that growth has come through acquisition, but not all.

MainSource completed its purchase of FCB Bancorp, Inc., the holding company for The First Capital Bank of Kentucky, Louisville, Ky., in a deal valued at $58.9 million on April 30. Full conversion of FCB is expected this quarter. The acquisition adds seven offices to MainSource’s current five in Kentucky as well as $520 million in assets.

Immediately after that deal was closed, MainSource announced it had entered into an agreement with Capstone Investment Management, LLC, Greenwood, Ind., and acquired the assets it had under management. Capstone’s owner Adam Allen and the staff joined the wealth management division of the bank.

The bank also released its first quarter unaudited financials, which showed net income of $12.1 million, an increase of $2.1 million on a linked-quarter basis. “Earnings per common share increased by 23 percent from a year ago as we continued to benefit from the Cheviot acquisition that closed in May 2016 and the organic loan growth from 2016,” said Archie Brown Jr., MainSource Financial president and CEO. “Strength in our net interest margin and non-interest income were also contributors to our strong earnings performance.”

However, reductions in revolving lines of credit and criticized assets “placed pressure on loan balances” while the bank also saw a higher than usual level of mortgage payoffs, Brown added. Overall credit quality is good, however, and the increase in non-performing assets comes largely from a commercial real estate loan acquired during the Cheviot merger which had been pre-determined to be a potential problem. Non-performing assets were at 0.62 percent or $25.2 million.

MainSource Bank also announced staffing changes as Bill Goodwin, chief credit officer for the bank, retired May 3. Goodwin joined MainSource Bank in 2009 with more than 25 years of banking experience in commercial lending, credit administration and mortgage banking. He developed the role of chief credit officer, and the bank credited him with helping maintain the bank’s “exceptional credit quality.”

“[Goodwin] has implemented robust policies governing credit approval, internal controls and portfolio diversification. As a result of his leadership, MainSource maintains a conservatively-managed loan portfolio that is positioned to withstand future economic turmoil,” Brown said. “His extensive credit experience, along with his leadership and knowledge, have been a great asset to MainSource.”

Chris Bower was named Goodwin’s successor in November 2016 so duties could be gradually transitioned. Bower had been one of MainSource’s commercial banking regional presidents and also joined the company in 2009. “I am very pleased to have Chris take on this very important role in our company,” Brown said. “I have been able to work with Chris for the last seven years. and I value his leadership, wisdom and judgment. Chris’s temperament, experience and deep industry knowledge will serve him well in his new role as our next chief credit officer.”