Central Bank President Steve Simon is a cup-half-full, if not overflowing, kind of guy who is quick with a smile and an invitation to sit and have a homey chat.

So you can imagine how alone he must have felt for the nearly 18 months he oversaw the Storm Lake-based operation’s lone branch in Greater Des Moines.

That changed late last year, when Central Bank completed its acquisition of the failed West Des Moines-based Liberty Bank chain, adding seven new branch banks to its one 
Central Bank branch in the metro area. It was the end of a three-year burn-down for Liberty   Bank and the beginning of what Simon believes will be a steady period of growth for Central Bank.

When the deal closed on Dec. 27, Liberty Bank’s remaining Greater Des Moines branches joined the Central Bank branch, which, at 6601 Westtown Parkway, is virtually across the street from Liberty Bank’s old headquarters.

In addition to expanding Central Bank by seven bricks-and-mortar locations, the bank’s workforce grew by 62 people, all hired from 
Liberty Bank.

“We hired more people than planned,” Simon said. “We ended up keeping a larger workforce because we liked the quality of the people.”

In addition to Liberty Bank’s employees, Central Bank acquired everything from extension cords to swampland in Florida.

“I can tell you that I do have swamp ground in Florida that I can sell you. It’s a fact,” he said.

Simon would not say what Central Bank paid for Liberty Bank, which at one time had nearly 30 branches in eight markets in Iowa, 
Illinois and Florida. Central Bank’s financial report for the fourth quarter of 2013, when the deal closed, indicate it paid about $2 million.

Liberty Bank’s operations in Florida were considered the bank’s undoing, draining it of capital and resulting in an order from federal banking regulators to raise more money and 
improve operations.

In the third quarter of 2010, the bank had assets of $1.2 billion. By Sept. 30, 2013, the last quarter for which it filed a financial statement, the bank had $267 million in assets, and its equity capital had fallen over a one-year period to about $16 million from $26 million.

The bank’s collapse also meant that the original investors recruited by the late William Krause, who founded the bank, had lost all of their money. Krause had invited prominent business, political and sports figures to invest 
in the bank. Gov. Terry Branstad was among them. In tax returns released in April 2010, Branstad noted that he was a minor investor in Liberty Banshares Iowa Inc., Liberty Bank’s 
parent company, and had lost a total of $31,365 on that investment and three others.

By the summer of 2011, investors were so disenchanted that they ignored a call to bolster the bank’s capital by $22 million. An indication of the financial hole Liberty Bank was in came in August 2011, when the bank reported a $9.7 million loss for the second quarter of the year as it charged off nearly $16 million in troubled loans and restructured another $8.9 million.

Little wonder, then, that when Simon suggested that his parent company, Commercial 
Financial Corp. of Storm Lake, buy Liberty Bank, the initial reaction was “Are you crazy?” he said.

For Simon, patience was the key to buying the troubled bank.

“If you’re the last guy to the party, you might be the guy who gets the deal,” he said. “Not many people needed seven locations in town. There would have been a lot of overlap for most of the other bidders.”

The deal did put a drag on Central Bank’s performance in the fourth quarter of last year, the quarter in which it completed the acquisition. Its return on assets, a key measure of 
profitability, was a flat 0 percent.

However, total assets grew to $654 million from $506 million, and deposits grew by nearly $170 million between the third and fourth quarters to nearly $595 million.

The growth in deposits was a key to the acquisition. 

“We put 95 percent of our dollars back into loans,” Simon said.

And although about 75 percent of Liberty Bank’s remaining $128 million in loans were performing by the time of the acquisition, Simon was left to work out several million dollars in loans that were in non-accrual status and to dispose of a property that Liberty Bank had on its books after acquiring deeds through foreclosures. 

“Everything came to roost here,” he said. “We said, ‘We’ll take everything. We’ll clean the slate and take your problems.’ ”

As a result, Simon is running a clean bank and a problem bank, but he sees nothing but opportunities for Central Bank to grow as a result.

“This going to work out really well,” he said.