GFA Federal Credit Union’s president/CEO said her credit union is showing by example that credit unions can work with community banks as it continues planning its purchase of a New Hampshire mutual.
“This is a great opportunity to recognize the similarities we share and how we can work together,” Tina Sbrega said Friday.
Her $345 million Gardner, Mass., credit union disclosed last month it has started an unprecedented regulatory process to purchase the $82 million Monadnock Community Bank of Peterborough for $6.4 million in cash.
Attorneys involved in the GFA deal have cautioned there are several legal hurdles to clear – including barriers on credit unions owning bank stock – but they insist it can be done because of the circumstances with an ailing bank.
They also point to the successfully completed takeover by the $1.3 billion United FCU in St. Joseph, Mich. of a troubled Indiana institution, Griffith Savings Bank.
Sbrega told Credit Union Times that reaction to the planned deal, which must win bank shareholder approval and is slated for consummation in the fourth quarter, has won favorable reaction so far in both Peterborough and in her western Massachusetts community.
“We remain very excited about our plans and we believe it does show what can be done when you believe in the credit union model,” she said.
The GFA CEO said she recognizes that purchase by her CU of a mutual stands in contrast to the conversion plans of the $1.8 billion HarborOne Credit Union of Brockton, Mass., to a mutual.
“I will miss Jim Blake because of the contributions he has made to our industry but each of us has to decide what is best for our members,” she said of the president/CEO of HarborOne, a former chairman of the Massachusetts Credit Union League and a former CUNA board member.
“We all have challenges but we have to decide what is best for our individual franchise,” she said.
Michael Bell, the Niles, Mich., attorney from the Kotz Sangster firm who is advising GFA on Monadnock, admitted the GFA/Monadnock buyout does represent a new legal threshold in bank/CU interaction.
“But all transactions have challenges and this one certainly has some,” he said. “That said, I’m approaching this with the same outlook as the UFCU transaction. I ask myself, ‘why can’t this work?’”
In this case, “I’m not getting no for an answer,” added Bell, who helped put together the combination of Griffith and UFCU after delays stretching through most of 2011 before it was approved by the NCUA, FDIC and other regulators.