GreenState Credit Union Takes Chicago in Third Bank Purchase This Year


Dive brief:

  • North Liberty, Iowa-based GreenState Credit Union has stepped up its Chicago footprint, agreeing to buy Midwest Community Bank and its subsidiary, Blueleaf Lending, in a deal expected to be concluded in the second quarter of 2022, the credit union said on Monday.
  • Midwest would become the third bank GreenState has purchased this year, following its May deals to buy Oak Brook, Illinois-based Oxford Bank & Trust and Omaha-based Premier Bank . The Midwestern deal would mark the 12th purchase of a bank by a credit union in 2021.
  • Even though some of GreenState’s 280,000 members are in neighboring states, May’s acquisitions for the first time pushed the credit union’s physical footprint outside of Iowa – in particular, to six branches in the western suburb of Chicago under the Oxford Accord. With Monday’s purchase, GreenState would acquire Blueleaf Lending’s offices in Chicago’s West Loop and in the neighboring communities of Norwood Park, Park Ridge and Skokie and in the outer suburbs of Naperville and St. Charles.

Dive overview:

Financial terms of the transaction were not disclosed, but thanks to Monday’s deal, GreenState would buy substantially all of Midwest’s assets and assume substantially all of its liabilities. This would encompass three Midwestern branches, two loan production offices, and the aforementioned Blueleaf footprint. Midwest has 20,000 members and $ 411 million in assets.

“When we looked for a potential partner, we wanted one that fits well with our core value of nurturing long-term customer relationships,” said Mark and Todd Wright, co-CEOs of Midwest, in the press release from Monday. “We have found this alignment with GreenState Credit Union. Together, we can do great things for our people, our customers and the communities we serve. “

The Midwestern states have proven to be a hotbed of mergers between banks and credit unions this year. Dubuque, Iowa-based Dupaco Community Credit Union agreed last month to buy Home Savings Bank in Madison, Wisconsin.

The Illinois-based Scott Credit Union announced in August that it would acquire another St. Louis-area institution, Tempo Bank. And the Wisconsin-based Royal Credit Union agreed to buy the Minnesota-based Lake Area Bank the same month.

The Michigan-based Lake Michigan Credit Union signed a $ 100 million deal in June to buy Pilot Bank, based in Tampa, Florida. And Minnesota-based Wings Financial Credit Union kicked off the year with a decision in January to buy Brainerd Savings & Loan.

This year’s 12 bank acquisitions by credit unions exceed seven in 2020 but are below the record of 16 sealed in 2019. The slowdown in activity in 2020 could be attributed to the start of the COVID-19 pandemic , but at least one merger and acquisition An expert warned over a year ago that bank purchases by credit unions would return at a breakneck pace.

“Depending on the moment [the pandemic] ends, I expect all of these things that are on hiatus to heat up, ”Michael Bell, co-lead of the financial institutions practice group at Honigman, told Banking Dive last year. “2021 will be busier than it was going to be. “

Honigman served as legal counsel for GreenState in Monday’s deal.

“The combined resources of GreenState and Midwest Community Bank will create great opportunities for their customers and the communities in which they live,” GreenState CEO Jeff Disterhoft said in the press release. “This means improvements in product pricing, branch expansion and digital convenience services that will improve the financial lives of their customers.

But the continued encroachment of credit unions into the community banking space has generated a steady decline from business groups such as the Independent Community Bankers of America (ICBA), who argue that the tax-exempt status of credit unions. credit allows them to offer a higher purchase price for acquisitions than banks. can, and let them grow more freely.

In late March, the decision by Jacksonville, Florida-based VyStar Credit Union to buy Georgian Heritage Southeast Bank for $ 195.7 million drew reprimands in May from the ICBA and the Community Bankers Association of Georgia (CBA), whose officers wrote to the regional manager of the Federal Deposit Insurance Corp. (FDIC), urging the regulator to reject the deal.

“VyStar has either closed, moved, sold or consolidated half of the branches acquired in the Citizens State Bank transaction,” the trade groups wrote, referring to the credit union’s 2019 purchase of a bank based in Perry, Florida.

CBA President and CEO John McNair added that the merger “would significantly reduce Community Reinvestment Act loans and strengthen branch consolidation in Georgia, hurting low and moderate income consumers in our communities. “.

Reconciliations between banks and credit unions increased in August, with five deals reached in just over two weeks, including the proposed acquisition of Financial Federal Bank by Tennessee-based Orion Federal Credit Union; the decision by Florida-based Fairwinds Credit Union to purchase Citizens Bank of Florida; and the proposed purchase by the Alabama Credit Union of the Security Federal Savings Bank.

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