DOTHAN, Ala.—Five Star CU here has signed an agreement to buy Flint River National Bank. The $260-million Five Star has offices in Alabama and Georgia.
Flint River, which has approximately $23 million in assets, has one location in Camilla, Ga. The deal is pending FRNB shareholder approval, and approval by both state regulators, the NCUA, OCC and FDIC.
Under the agreement, FSCU will purchase all loans, investments, real estate, accrued interest receivables, and other banking-related assets of FRNB valued at $21 million, after a discount to the loan portfolio agreed to by the parties. The CU will assume all deposits. Last year the bank lost $995,000, according to its Dec. 31 Call Report.
FSCU CEO Bob Steensma said the credit union is “pleased to have the opportunity to expand” into southwest Georgia.
Michael Bell, an attorney and counselor with Howard & Howard in Detroit, who is representing Five Star, explained the deal came together quickly and that he does not expect it will take a lengthy amount of time for the agreement to be approved. “All regulators are getting much more comfortable with these kinds of deals as we establish more processes and procedures around them.”
Earlier this year Bell told Credit Union Journal to expect more CUs to buy banks and specifically cited the Southeast, adding that announcements of similar deals in that area of the country may be made in the coming months. “The Southeast has such a volume of small banks and the area is ripe for this kind of arrangement.”
There have been four other credit union acquisitions of banks over the past two years. In Baltimore, Municipal Employees CU of Baltimore is purchasing $61-million Baltimore-based Advance Bank. Wisconsin’s Landmark CU acquired Hartford Savings Bank; Massachusetts’ GFA FCU acquired New Hampshire’s Monadnock Savings Bank, and the credit union that put everything in motion, Michigan’s United FCU acquired Griffith Savings Bank in Indiana. Bell represents United FCU, GFA FCU and Municipal Employees CU of Baltimore.
