TALLAHASSE, Fla. — Credit unions continue to buy banks, with First Commerce CU here entering into a purchase and assumption agreement with First National Bank of Crestview.
If approved, the deal will mark the sixth credit union purchase of a bank in the last three years, and the first in Florida.
The agreement has been approved by the boards of both financial institutions and includes the purchase of FNB's assets and assumption of its liabilities. No sale price was shared.
The transaction must be approved by the NCUA, OCC, FDIC and the state regulator. FCCU and the Crestview, Fla.-based FNB hope the deal will be finalized by late 2014 or early 2015.
"As a multi-generational family bank, after much deliberation and with our customers in mind, our board members have decided to take a less active role in the banking industry," said Crestview Chairman J.D. "Jake" Wingard. "We focused on finding the right financial institution partner, and First Commerce offers many unique advantages."
Dale Rice Jr., president and CEO of FNB, explained that the bank was looking for a strong Florida FI to partner with.
"We are confident that our search led us to an established, financially secure, growing credit union in our region that shares our values and and will bring expanded products and services to our loyal customers," said Rice, who will remain with First Commerce as regional executive, responsible for oversight of day-to-day operations in Crestview.
With three locations, First National Bank of Crestview is a private commercial bank with approximately 5,000 customers and $85 million in assets. The $410 million First Commerce has more than 43,000 members and nine offices.
Through June, First Commerce showed 12.68% net worth, 138 BPs of ROA, and last year the CU turned a $2.9 million profit.
FNB has faced financial difficulty, losing $457,000 in the first six months of 2014 after dropping $2.3 million last year. The bank's June 30 financial statement also shows a $521,000 loss on selling foreclosed real estate.
"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," said Cecilia Homison, CEO of First Commerce. "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."
Michael Bell, attorney and counselor with Royal-Oak, Mich.-based Howard & Howard, is representing First Commerce. He said the $260 million Dothan, Ala.-based Five Star CU purchase of the $23 million Flint River National Bank in Camilla, Ga., which he was part of, sets the stage for the First Commerce agreement.
"I cannot speak about the specifics of this deal. However, in general terms, this agreement trails the recently closed Five Star Credit Union deal and there are certainly similarities," said Bell. "Flint River and FNB are both national banks. The CUs involved in both deals are state chartered, and both come from the same NCUA region. These deals should and will get easier to do."
Bell, who previously stated more CU purchases of banks were coming this year, said more CU/bank deals in Florida will happen in 2014 and 2015. "This is the first of multiple deals that should happen in this state. The southeast is fertile ground for deals of this nature."
In addition to the proposed FNB sale and the Five Star agreement, other CUs to buy banks in the last three years: $1.2 billion Municipal Employees CU purchased $61 million Baltimore-based Advance Bank; Wisconsin's $2.1 billion Landmark CU acquired $190 million Hartford Savings Bank; Massachusetts' $429 million GFA FCU bought New Hampshire's $83 million Monadnock Savings Bank; and the credit union that put everything in motion — Michigan's $1.6 billion United FCU — acquired $81 million Griffith Savings Bank in Indiana.
