HARRISBURG, Pa. -- As one of the first entities to bring trust services to credit unions back in the late 1990s, Sentry Trust Co. has changed hands several times. On Sept. 15, the trust firm was acquired by $3.3 billion Community Banks, Inc.'s subsidiary, CommunityBanks. This is the second time Chambersburg, Pa.-based Sentry has been acquired in two years. In March 2004, it was bought by Sun Bancorp, Inc. Six months later in October 2004, Sun Bancorp was acquired by Omega Financial Corp., a $2 billion financial holding company. With the latest acquisition, Sentry has become a part of CommunityBanks Trust & Asset Management, and will continue to operate as Sentry Trust Co. CommunityBanks operates 73 banking offices throughout central and eastern Pennsylvania and northern Maryland. Terms of the deal were not disclosed. Sentry's CEO, Chuck Nelson, left the company in February, said David Poch, a spokesman for CommunityBanks. Poch said Sentry's 10 employees will remain on staff.
Community Banks, Inc. has been on a buying and merger spree over the past year including an acquisition announcement to acquire a former credit union. September alone saw plans to merge with $57 million East Prospect State Bank in East Prospect, Pa., and $143 million BUCS Financial Corp. in Owings Mills, Md. BUCS is the former BUCS Federal Credit Union, which served employees of CareFirst/BlueCross/BlueShield. It converted into a mutual savings bank in 1998 and became one of the earliest credit union-to-bank charters in the nation. Both Community Banks' mergers are expected to be finalized by the second quarter and April 2007, respectively. In May, it acquired Mt. Joy, Pa.-based Wiley Insurance Agency, Inc. and last July it bought Blue Ball National Bank, which boosted Community Banks' assets to $3.5 billion at the time.
Meanwhile, Sentry's roots go back to May 1997 when it was founded as an independent, local trust company. At the time, the $349 million Patriot Federal Credit Union was its largest and only credit union shareholder. It would eventually have to divest its 20% share because after Sentry acquired the trust departments at Fulton County National Bank in 1999 and First National Bank of Greencastle in 2001, NCUA's "50 plus one" regulation kicked in, which requires CUSOs to serve a majority credit union member base.
The $8 million Community of Healthcare Employees Credit Union also used Sentry for its members' estate planning needs, said Jenna Kaczmarek, president/CEO. When the trust company was acquired in 2004, there was a feeling of loss.
"It was more disappointing to see a local, community oriented trust company be consumed by a larger bank and lose the wealth of trust expertise," Kaczmarek said. "We wanted to align with a company that was homegrown and employed people from the community. I was a relatively new CEO at the time and I really valued the kind of experience and guidance that gave me."
CHECU had a roughly $1 million investment portfolio with Sentry and pulled its accounts after the 2004 deal, Kaczmarek said. After ending its relationship, the credit union "struggled because [it] didn't have a CUSO that offered trust services," she added. It now directs members with estate planning queries to their respective attorneys and currently has a "wonderful" investment relationship with Mid-Atlantic Corporate Federal Credit Union.
If a member came to Kaczmarek with a problem they may have had at Sentry, someone there could sit down and really discuss it. Her parents even had a relationship with the trust company, she pointed out.
"There's this misconception that just because you have all this wealth, you know what to do with it," Kaczmarek said, adding Sentry staff didn't talk above anyone's heads. "When you're dealing with people's money, it's a very heavy subject."
The Sentry acquisition is a pivotal addition to CommunityBanks' direction, said Eddie Dunklebarger, chairman, president/CEO.
"The addition of Sentry Trust Company is an important step in the expansion of our trust and asset management services," Dunklebarger said. "The acquisition adds depth to our trust administration services and provides CommunityBanks the capability to offer fiduciary services to the growing Cumberland Valley. At the same time, Sentry complements our banking expansion into Chambersburg this year."
Poch said Sentry has no desire to end its ties to credit unions. "We're still very interested in credit unions and we're very interested in serving that market," Poch said. Kaczmarek said with 75% of its members under age 55, it's a demographic that she finds needs estate planning services but "right now, other items [at CHECU] have taken priority." On the flip side, smaller credit unions often find it difficult and expensive to bring trust services to their members, she pointed out.
"It's hard for credit unions to compete in that arena," Kaczmarek said. "Unless you have a CUSO, if you're an $8 million credit union like us, it's hard to compete. The compliance alone is hard." --firstname.lastname@example.org