Ex-Talmer and MidwestOne chiefs take control of Chicago's $3.7 billion Parkway Bank

The $350 million equals about 9.5% of Parkway's $3.7 billion in assets ^[18]. It paid for two things. It funded a tender offer for shares held by the former owners, and it added to the bank's capital ^[4]. "It's really estate planning and succession planning on that side, but it's a great opportunity for us," Provost said of the sellers ^[17]. American Banker's report does not say how the money was divided between the tender and the balance sheet, and only the balance-sheet share can support new loans ^[4].

By its record, the bank they bought is clean. Parkway has reported a profit every year since 2011 and has avoided asset-quality problems since working through a spike in bad loans after the 2008 crisis ^[6]. "It's a very clean platform, which gives us a lot of opportunity to grow without having to work on cleaning up some issues," Provost said ^[7]. Commercial real estate is its stronger business. Reeves said the first job is building commercial-and-industrial lending alongside it ^[8].

"I think you'll see more C&I lending, more of what I'll call traditional business lending, more core-deposit franchise build than what former Parkway was able to accomplish," Reeves said ^[9]. Hiring comes first. "We have about 20 bankers that are going to be joining us over the next 30 days, and we'll continue to build from there," he said ^[10]. If those bankers come from other Chicago lenders, the fight for business borrowers and their deposits starts with clients following the people who already cover them.

Parkway has three paths from here, and the evidence supports them unevenly. Organic growth in Chicago is the only one with a timetable: 30 days for the hires ^[10]. Acquisitions are a stated aim but a later one. American Banker describes M&A as a longer-term option ^[13], and Provost's wording allows for opening offices instead of buying banks. He said they would look for opportunities to buy some banks or establish some offices around the Midwest ^[11]. He named a state. "I'd love to have something in Michigan, where we have a lot of investors on the retail side, on the non-private-equity side. It's a good base for us to capitalize on," Provost said ^[12].

The third path is a sale, and it comes from the two men's records. Talmer, which Provost helped found in 2007, merged with Chemical Bank in 2016 ^[14], nine years later ^[20]. Provost became CEO of the $48 billion-asset TCF in October 2020, and two months later TCF announced its merger with Huntington Bancshares ^[15]. Reeves ran MidwestOne until its sale to Nicolet Bankshares in February ^[1]. Parkway is about one-thirteenth the size TCF was ^[19]. Provost's five-year noncompete from the TCF sale expired in June ^[16].

I think the Chicago competition for business bankers and deposits shows up first, and the bank-buyer case is a later option on top of it. The case against that view is how specific Provost was: he named Michigan and pointed to the investors he has there ^[12]. If Parkway announces a bank purchase before its commercial-and-industrial book shows any growth, the deal path came first and this view had the order wrong.