VyStar Credit Union delays completion of bank acquisition

VyStar Credit Union in Jacksonville, Florida, has extended the timeline for completing its purchase of Heritage Southeast Bank in Jonesboro, Georgia.

Heritage, with $1.7 billion of assets, announced Friday that both parties agreed to waive their respective rights to terminate the agreement until Feb. 28, 2022, to grant regulators a wider window for approval, as well as to ensure all conditions of the deal are met.

The $11 billion-asset VyStar announced earlier this year that it had agreed to acquire the bank. The deal was expected to close by the end of 2021.

Some other bank mergers and acquisitions announced this year have had extended timelines, including New York Community Bancorp's deal for Flagstar Bancorp and First Citizens Bancshares' deal for CIT Group.

Factors contributing to delays range from calls for public hearings on potential deals — as happened with Old National Bancorp's purchase of First Midwest Bancorp — to federal regulators tasked by the Biden administration with reviewing their approval processes.

Under the terms of the agreement, VyStar will pay Heritage Southeast Bancorp., the holding company for Heritage Southeast, an aggregate amount to ensure that its shareholders receive a per-share price of $27 after the bank settles all other outstanding debt and liabilities. Costs incurred through the settlement of liabilities will affect the per-share consideration, with no further guidance provided.

Additionally, the price paid by the credit union will increase by a sum equal to the holding company's consolidated net profit, after certain deductions, for each month from Oct. 1, 2021, through the closing date.