Iowa CU In Deal To Buy Its OwnBank

IOWA CITY, Iowa - (01/24/03) -- University of Iowa Community CU isbelieved to be the first credit union to buy a bank with a dealannounced Thursday to acquire privately-held Hawkeye State Bank. The deal, which still requires final approval fromstate regulators and NCUA, is possible because UICCU is a communitycharter, eliminating any field of membership issues, according toJeff Disterhoft, president of the $300 million credit union. Plansare to combine the banks $160 million in assets and its two localbranches with those of the credit union. "We would merge it intoour operation and it would all be part of University of IowaCommunity Credit Union," Disterhoft told The Credit Union Journal.The credit union became interested in the deal two weeks ago whenthe bank fired its longtime CEO, prompting credit unionrepresentatives to approach the bank's sole owner, Russell Gerdin.Disterhoft said one of the major attractions of the bank is itscommercial services, "particularly on the deposit side." Disterhoftsaid he expects some of the bank's deposits to 'roll off' after theacquisition but hopes to persuade most of the existing customers toretain their relationship by demonstrating good service. Terms ofthe deal were not disclosed.