Corporate America Family Credit Union snaps up Illinois bank
Corporate America Family Credit Union in Elgin, Ill., has announced its intent to buy Ben Franklin Bank of Illinois.
The deal is the latest in a slew of credit union-bank purchases so far this year, including last month's announcement that Wisconsin-based Verve, a Credit Union, would buy Chicago-based South Central Bank.
Corporate America Family said in a press release that it will acquire the assets and assume liability of the $93.2 million-asset institution in an all-cash deal. The acquisition will bump CAFCU's branch network to 22 locations, lifting total assets to approximately $700 million.
The boards of directors at both institutions unanimously approved the transaction. The deal is expected to close in early 2020 and is subject to regulatory approval and customary closing conditions.
“We are looking forward to the acquisition of Ben Franklin Bank and feel this will be an excellent opportunity to provide even more individuals with the products and services CAFCU offers in furthering financial goals and dreams,” Peter Paulson, the credit union’s president and CEO, said in a press release.
CAFCU will pay shareholders $10.33 to $10.70 per share. The bank had 1.3 million shares outstanding on Dec. 31, meaning the credit union will pay $13.5 million to $14 million for most of the company's assets. The price also represents a 52% premium over Ben Franklin's closing stock price on Monday. The sale was announced Tuesday and shares of Ben Franklin Financial were up 43% on Wednesday.
Following the sale, the bank's remaining assets will be dispersed among Ben Franklin Financial stockholders after all obligations are settled. Ben Franklin Bank and Ben Franklin Financial will cease upon completion of the transaction.
Ben Franklin Bank, which is based in Arlington Heights, Ill., currently operates two branches in the Chicago suburbs. Both locations will continue operations as CAFCU branches once the deal closes and Ben Franklin customers will be converted to CAFCU members.
“We have spent a long time seeking to maximize stockholder value and believe that we have negotiated an outstanding transaction for our stockholders,” C. Steven Sjogren, president and CEO of Ben Franklin Financial, said in the release.
The transaction is the first in which a federal mutual holding company converted to a stock holding company in the wake of Dodd-Frank's implementation will have its assets and liabilities picked up by a credit union.