United FCU Purchase of Bank On Track
The $1.3 billion United Federal Credit Union of St. Joseph, Mich. said last week its proposed–and rare–merger with an ailing Indiana savings bank is on track and could win final regulatory approval by the end of this month, according to the president/CEO of UFCU, Gary Easterling.
So far no other copycat deals like that of the healthy United FCU taking over the $83 million Griffith Savings Bank have surfaced, said Easterling. The planned CU-bank marriage was first announced in July.
“I think a lot of people are just waiting until this is a done deal before deciding whether to go ahead,” observed Easterling, referring to regulatory approval awaited from the NCUA and the FDIC. Both agencies have all the current paperwork and, based on recent developments, the transaction and the conversion could be completed by the fourth quarter, he said.
Griffith, located in the Gary-Hammond rust belt of northwest Indiana and undercapitalized, had been urged by regulators over the last year to find a merger partner and turned to a CU having once flirted with the idea of what would have been a bank-to-CU conversion.
United FCU is just across the Indiana line with 22 branches in five states–Michigan, Nevada, Arkansas, North Carolina, and Ohio–and so the merger of the 73-year-old Griffith would fit into the CU’s expansion into Indiana, said Easterling.
The Michigan CU has acknowledged it was initially surprised by the merger bid, shepherded by an Indianapolis investment banking consultant, though it has had experience merging troubled CUs, having consolidated in 2009 the $175 million Clearstar Financial CU, of Reno.
As part of the United-Griffith transaction, bank shareholder approval was received two weeks ago and that included providing new membership in the American Consumer Council of San Diego to meet field of membership rules. A number of West Coast CUs have similar dues deals with ACC, said Easterling.