Alabama Credit Union Buying Georgia Bank
The $255 million Five Star CU in Dothan, Ala., announced this week that it plans to buy a small bank that has one location in Georgia.
The 23,000-member Five Star and Flint River National Bank have signed a definitive agreement that includes Five Star assuming the bank's deposits and accrued interest payable, and purchasing all loans, investments, real estate, accrued interest receivables, and other banking-related assets, valued at approximately $21 million (after a discount to the loan portfolio agreed to by the parties), the credit union said.
The deal is pending approval by the bank's shareholders, the NCUA, OCC, FDIC and state regulators, said attorney Michael Bell, who represents the credit union.
Five Star plans to assume operation of the bank's only location in Camilla, Ga., the credit union said.
“We are extremely pleased to have the opportunity to expand our market presence in southwest Georgia,” Five Star President/CEO Bob Steensma said in a press release announcing the agreement. “We welcome FRNB’s customers and employees to the FSCU family and look forward to integrating ourselves into these additional communities in southwest Georgia.”
First Star was advised by Peter Williams of Feldman Financial Advisors in Washington, D.C., and the bank was advised by Joe Morton of the Hevad Group in Austin, Texas, the credit union said.
Bell, a member of the law firm Howard & Howard in Detroit, said Wednesday that the deal will likely be finalized without lengthy delay because regulators have become increasingly comfortable with credit unions buying banks.
“This is nothing new to them anymore since many similar agreements have been reached during the past few years,” he added.
Other similar deals that have been finalized during the past few years include:
- The $1.5 billion United Federal Credit Union in St. Joseph, Mich., acquired Griffith Savings Bank.
- The $2.1 billion Landmark Credit Union in New Berlin, Wis., purchased the $190 million Hartford Savings Bank.
- The $352 million GFA Federal Credit Union of Gardner, Mass., bought Monadnock Community Bank.
Bell said he expects other credit unions to buy banks, especially in New England and the Southeast.
“I am working with several other organizations that are considering similar agreements, but I can't discuss specific details at this time,” he said. “Within the next six to eight months, I expect we will see about five more credit unions buying banks.”