FDIC Garage Sale Offers Bargains to CUs
The spate of Southeast bank failures is providing some extra bargains for credit unions that are able to acquire abandoned bank branches and other property.
Credit unions in Georgia and Florida, in particular, have taken advantage of low priced branch buildings and furnishings posted for sale on the FDIC’s online asset sale list of real estate and equipment.
Marshall Boutwell, the new chairman of Georgia Credit Union Affiliates and president/CEO of the $225 million Gwinnett FCU of Lawrenceville, said his credit union a year ago purchased two of the abandoned branches. “And so far it’s worked out quite well,” he said.
Meanwhile, the $175 million MidSouth Community FCU in Macon, said it is opening a former bank branch in north Macon on June 1 after putting in successful bids on the FDIC site. Two years ago it bought two other bank branch buildings in the Milledgeville area.
And the $457 million Insight Credit Union of Orlando said it has pending offers with the FDIC to buy two failed bank branches in Ocala, Fla., which, if the offers are accepted by the agency, could open their doors in June.
“Some of those branch buildings from the failed banks can be purchased for 50 cents on the dollar,” said Boutwell, noting he does periodically look at the FDIC list while also hearing from vendors on potential acquisitions.
DeAnn Dent, vice president-credit union development at MidSouth, said she watches the FDIC asset list on a daily basis. In addition to the new north Macon branch acquired from a banker failure, she said her credit union has managed to pick up furniture bargains.
“We bought an amazing set of furnishings for $3,000 for one of our branches by monitoring the FDIC list, and we also look for the notices given to online auction companies,” explained Dent.
MidSouth, she said, was able to acquire nearly $14,000 worth of high-end furnishings for $2,800 plus a $200 delivery fee.
Boutwell said that the failed banks that once owned the properties and were forced to give them up in a takeover or merger usually did plenty of advance research for good locations. Moreover, the facilities themselves are often in good condition needing little renovation, he said.
A spokesman for the FDIC said its assets sale list, open to the public, lists properties that are conveyed to the FDIC from failed banks as well as those foreclosed by an FDIC receivership once the agency acquired the property from a failed bank.
John Rhea, president/CEO of the $1.7 billion Robins FCU in Warner Robins, Ga. said it does make use of the FDIC list but managed to make a deal on a bank branch a year ago in Forsyth, Ga. prior to its failure. Rhea, however, urged his peers to check the FDIC list for vacant land buys.
There can be good deals, he said, among properties that may have been purchased some time ago for a prospective branch but the bank dropped its plans in the face of a regulatory takeover or merger.
“MidSouth is pretty smart about how they handle the FDIC list,” said Rhea in praising his Georgia neighbor.