PETERBOROUGH, N.H. – Shareholders of troubled Monadnock Community Bank yesterday approved the sale of the $83 million bank to GFA FCU in nearby Gardner, Mass., the second credit union deal for a bank in six months.
The sale returns the tiny southern New Hampshire bank to the credit union fold, where it began as AWANE FCU before its 1996 conversion to a mutually savings bank—the first credit union to convert to a bank.
The deal also follows December’s acquisition of Griffith (Indiana) Savings Bank by Michigan’s United FCU, the first ever credit union acquisition of a bank. But this is the first time a credit union has acquired a stockholder-owned bank.
The rare deal was prompted by the declining financial condition of the credit union-turned-bank, which lost $1.8 million in 2011 and still owes the federal government $1.8 million borrowed under the Troubled Asset Relief Program, or TARP.
Under the terms of the Monadnock sale, GFA, a $350 million credit union based in northwest Massachusetts, will pay $6.4 million. The deal must still be approved by regulators, including NCUA and the FDIC.
Monadnock, named for the nearby peak of New Hampshire’s Mount Monadnock, had $10 million in assets when it switched to a bank in 1996 and rose to as much as $110 million in 2010. It went public in 2004 with an initial public offering of stock.
