First Commerce CU to Buy Small Florida Bank
The $406 million First Commerce Credit Union said it entered into a purchase and assumption agreement to acquire the $89 million First National Bank in Crestview, Fla., according to a prepared statement from the Tallahassee-based cooperative.
Terms of the deal were not disclosed.
The pending purchase could potentially bring nearly 10,000 new members to First Commerce CU and expand its presence in Okaloosa County. First National Bank has been struggling financially over the last five years with declining assets, total deposits, and net income losses, according to the bank’s financial statements filed with the FDIC.
From 2009 to 2013, the bank’s assets fell from $152 million to $90 million, while total deposits in those same years dropped from $135 million to $87 million, according to FNB’s financial statements. From 2009 to 2103, the bank posted total net losses of $17.5 million.
At the end of 2013, the bank’s return on assets was -2.39% and its return on equity was -60.13%.
Founded in 1956, FNB operates three branches in Okaloosa County, which is not located in First Commerce CU’s field of membership, according to its website. The cooperative’s FOM primarily encompasses 21 counties in Florida’s panhandle region and two counties in Georgia.
If the deal is approved by state and federal regulators, it would enable the cooperative to expand into Okaloosa County.
“As a growing credit union looking for opportunities to expand our services in the Southeast, we are excited about this forward-thinking collaboration and feel it is a great fit all the way around,” Cecilia Homison, president/CEO of First Commerce CU, said in a prepared statement. “We look forward to welcoming First National Bank team members and customers to the First Commerce family and bringing them our model of remarkable service, expanded offerings and commitment to community.”
Dale E. Rice Jr., president/CEO of FNB, will remain with the credit union as a regional executive responsible for overseeing the day-to-day operations in Crestview.
In its prepared statement announcing the deal last week, however, the credit union did not specify how it planned to convert the bank’s nearly 10,000 customers to members.
The proposed deal is expected to close by the end of this year or in early 2015, according to First Commerce CU’s prepared statement.
This is the first credit union acquisition of a commercial bank announced this year.
In May, the purchase of the $21 million Flint River National Bank in Camilla, Ga., by the $275 million Five Star Credit Union in Dothan, Ala., was finalized after approval by the NCUA.
Other recent bank acquisitions by credit unions include:
- The $2.5 billion Landmark Credit Union in New Berlin, Wis., purchased the $190 million Hartford Savings Bank in 2013.
- The $1.2 billion Municipal Employees Credit Union in Baltimore acquired the $62 million Advance Mutual Savings Bank in Baltimore in 2013.
- The $1.7 billion United Federal Credit Union in St. Joseph, Mich., purchased Griffith Savings Bank in 2012.
- The $417 million GFA Federal Credit Union of Gardner, Mass., bought Monadnock Community Bank in 2012.