In a bank/credit union sale, the $1 billion Royal Credit Union of Eau Claire, Wis. is buying 11 branches from a troubled former thrift, AnchorBank of Madison, Wis.
Under the deal subject to regulatory approval, Royal, the state's fifth largest credit union, will acquire the properties and $177 million in deposits, loans, real estate and other assets, a statement said. Terms were not disclosed.
Regulators said the transaction is by far the largest of its kind in years and underscores the continuing effects of the recession on financial institutions with banks in many parts of the country taking the brunt of negative fallout. The number of bank failures has climbed past 123 with CU conservatorships in the upper 20's.
Under the sale, Royal will expand its geographic footprint to a group of communities in western Wisconsin near the Minnesota state line where it has members but no branches.
AnchorBank Chief Executive Chris Bauer said the sale will shrink Anchor's assets while improving its capital and ability to address asset quality and other obligations. The sale will bring AnchorBank in compliance with an Office of Thrift Supervision supervisory agreement that calls for higher capital ratios and reduction of operating expenses.
"This transaction with RCU allows AnchorBank to make significant progress toward our goal of increasing our capital ratios in order to continue to address the challenges we're facing in this economic climate," Bauer said.
For its part, Charles Grossklaus, president/CEO, said when complete Royal Credit Union will have 26 branches and more than 140,000 members. The new offices being acquired are in Amery, Balsam Lake, Centuria, Menomonie, Milltown, New Richmond, Osceola, River Falls, St. Croix Falls, Somerset and Star Prairie.
"We are excited by the opportunity to acquire these AnchorBank offices, which fit perfectly into our five-year expansion plan," said Grossklaus.