Regulator blocks Iowa credit union's purchase of Nebraska bank

The Nebraska Department of Banking and Finance has shot down the proposed sale of Premier Bank in Omaha to an Iowa credit union.

The agency formally denied the application submitted by the $395 million-asset Premier after the bank failed to provide evidence supporting the legality of the deal it had reached with the $8 billion-asset GreenState Credit Union in North Liberty, Iowa.

“Premier has not carried its burden of proof in this proceeding to show that there is express power under federal law for a national bank to sell substantially all of its assets under the factual circumstances presented in this proceeding,” the agency said as part of the decision published Dec. 30.

During a Sept. 20 hearing, the Nebraska Bankers Association acted as an opposing party in the proceedings. Along with other banking trade organizations, the Nebraska Bankers had submitted formal objections to the proposed purchase of Premier prior to the hearings.

Chris Maher, chairman and CEO of Premier, stated his bank is disappointed with the ruling but remains confident that “a proper interpretation of Nebraska law will overturn the decision and allow Nebraskans a free market to choose their preferred financial services provider.”

One of the primary conclusions drawn by the NDBF against the sale was that because GreenState is established according to the laws of its home state of Iowa, it does not meet the definition of a “financial institution” that can participate in cross-industry acquisitions or mergers in Nebraska.

“A financial institution by definition excludes a financial institution organized under the laws of another state, rather than under Nebraska's laws or under the laws of the United States doing business in Nebraska … GreenState is a credit union organized under the laws of the state of Iowa and is not a financial institution authorized to acquire a Nebraska financial institution under such statute,” the agency said.

A spokesperson for the credit union stressed that while disappointed with the decision, GreenState remains optimistic that the deal will eventually be finalized.

“The efforts made by the Nebraska Bankers Association are simply blocking consumer choice for Nebraskans … GreenState will create jobs, give back to the local community and put money back into the pockets of its Nebraska members,” the credit union said in a prepared statement.

This denial is not the first time the credit union has faced regulatory pushback.

In 2019, when GreenState was in the midst of purchasing seven branches and related assets from First American Bank in Fort Dodge, Iowa, the state’s superintendent of banking denied the application on the grounds that the deal was finalized without his decision.

First American eventually reached a settlement with the state superintendent, allowing the sale of its branches and other assets to proceed.

GreenState’s deal for Premier added to a series of bank M&A deals it struck in 2021. It also agreed to acquire the $743 million-asset Oxford Bank & Trust in Oakbrook, Illinois, and the $352 million-asset Midwest Community Bank in Freeport, Illinois.