BALTIMORE Municipal Employees CU of Baltimore announced this morning an agreement to acquire troubled $61 million Baltimore-based Advance Bank, the fourth credit union acquisition of a bank in the last 18 months.
Under a purchase and assumption deal, $1.2 billion MECU will purchase all loans, investments, real estate, accrued interest receivables, and other banking-related assets, including two branches, of Advance and will assume all deposits, Federal Home Loan Bank advances, and accrued interest payable. Advance will be retaining certain assets that will be used to fund certain liabilities that will not be acquired by MECU in the transaction.
After the resolution of these liabilities, Advance, which is a minority-owned bank, will surrender its charter and distribute any remaining net assets to its members pursuant to a plan of dissolution.
Advance Bank eked out a $196,000 profit in 2012 after an $836,000 loss for 2011, while its assets declined from $66 million to $61 million last year.
“This is an exciting transaction. Both MECU and Advance are mutual institutions that are owned by their members,” said John Hamilton, president of Advance. “ Our operating philosophy and principals are strikingly similar. We pride ourselves on providing our members with excellent customer service. Both MECU and Advance are strongly dedicated to their employees.”
“Advance has served its community well for over 50 years and we look forward to building on that relationship and to bringing expanded products, services and convenience to its members,” said Bert Hash, president of MECU. “We also look forward to expanding our footprint and to having Advance’s employees join the MECU family.”
This acquisition is subject to regulatory approvals and is expected to close in the fourth quarter of 2013.
Over the last 18 months Wisconson’s Landmark CU has acquired Hartford Savings Bank; Massachusetts’ GFA FCU has acquired New Hampshire’s Monadnock Savings Bank; and Michigan’s United FCU has acquired Griffith Savings Bank in Indiana.
Advance was represented by Barry Taff and Michael Sadow of Silver, Freedman & Taff, L.L.P., the Washington, D.C. firm known for converting credit unions to mutual savings banks. MECU was represented by Michael Bell, of Howard and Howard, Royal Oak, Mich., and James Brown III of Brown & Brown.
