The $55 million Northwoods Credit Union of Cloquet, Minn., is joining the list of credit unions buying bank branches and in this case the deal includes deposits as well as the building.
“We are very exciting about this planned purchase which we are hoping can be completed by July 20 after we receive regulatory approval from NCUA and the FDIC,” said Barbara Brown, president/CEO.
The credit union is purchasing a branch of Duluth-based North Shore Bank of Commerce located close by a Walmart store in Cloquet, a northeast Minnesota community of 12,000. Terms were not disclosed.
Brown said the credit union had been making plans to build its own branch near the same location when it made contact with management of the $232 million North Shore about its interest in selling the branch the bank considered underperforming.
“We were a bit surprised but they liked the idea and we started negotiations,” Brown said. She said the facility would be a good fit for her credit union which had recently opted for a community charter.
Northwoods Credit Union had maintained its Cloquet office near a large paper mill and had won city approval to open the second branch on the other side of the city. Meanwhile, the bank’s Cloquet branch had been open eight years with 800 customers.
In considering the credit union/bank branch deal, the FDIC said it will keep open a public comment period until June 4.
In media comments, the bank has said it intends to keep the loans from its Cloquet facility but sources said the credit union may eventually try to purchase those as well.