ST. JOSEPH, Mich.-United FCU, an active acquirer of troubled credit unions, announced last week said it plans to acquire Griffith Savings Bank, a troubled, $80-million bank in Indiana.
United, which in 2009 acquired Clearstar Financial CU, a failed $175-million credit union in Reno, Nev., plans to enter into a purchase-and-assumption agreement for the ailing Indiana bank, based in nearby Griffith, Ind.
Several credit union organizations have tried and failed to acquire banks in recent years, including University of Iowa Community CU and later the Iowa CU League. Texas credit unions have operated their own bank, Town North Bank in Dallas, for years.
The $1.3-billion United FCU said in a statement that it would "purchase all loans, investments, real estate, accrued interest receivables, and other banking-related assets of Griffith with an estimated value of approximately $81 million, after a discount to the loan portfolio agreed to by the parties, and will assume all deposits, Federal Home Loan Bank advances, and accrued interest payable of approximately $81 million."
"Griffith will be retaining certain assets that will be used to fund accrued liabilities relating to its employee benefit plans, which will not be acquired by UFCU in the transaction. This acquisition is subject to regulatory approvals and is expected to close in the third quarter of 2011," the credit union's statement said. Griffith also intends to liquidate following the closing and distribute any remaining net assets at the time of liquidation to its depositors. Although the amount of the distribution cannot be determined at this time, depositors who retain accounts at UFCU will be credited with their pro rata distribution upon Griffith's liquidation. Other depositors will be sent their distributions," the statement said.
"Griffith intends to liquidate following the closing and distribute any remaining net assets at the time of liquidation to its depositors."
