CHICAGO-Commercial Bancshares Corp. has purchased a controlling interest in CenTrust Finanical Inc., the parent company of CenTrust Bank NA, with a $10-million investment. The move was the first acquisition by Commercial Bancshares, which has said it plans to continue mergers and buy-outs.

CenTrust is a community bank with $105 million in assets and a single branch in the Chicago area. The investment of Commercial Bancshares, which was organized to provide such an acquisition, provides a recapitalization, and an 87% stake, of the bank. Warson Capital Partners LLC, based in St. Louis, served as financial advisor for the transaction.

Chester Ward, chairman and CEO of Commercial Bancshares, says management reviewed 26 banks as acquisition targets to establish a community banking group for the region. He tells GlobeSt.com that prices are depressed and opportunities are out there. “The opportunity comes when assets fall below liabilities, and we ask the business question, is this a target for recapitalization? Is this a troubled bank, or is it simply a matter of where we are in the economic cycle, where nothing is wrong with management or the balance sheet?”

Ward, who cut his teeth on banks with the application process for Illinois State Bank in 1995 (later sold to North Shore Bank in 2006), will serve on a new board of directors of CenTrust. John Benson, president of CenTrust, will continue his position and will also serve on the new board.

Small banks are currently experiencing a trough in the economic cycle, which it’s not clear when or if the trough will go up or down, Ward says. “We’re saying we don’t know,” he says. “But the other thing that’s known is the bank stock multiple pricing cycle, which is repeatable and predictable, and we know that will return. Our goal is to buy the banks and recapitalize, and ride the cycle until assets are greater than liabilities.”