Illinois credit union buying Ben Franklin Financial
Corporate America Family Credit Union in Elgin, Ill., has agreed to buy Ben Franklin Bank in Arlington Heights, Ill.
The $610 million-asset credit union said in a press release Tuesday that it will pay $13.5 million to $14 million in cash for most of Ben Franklin Financial's $93 million in assets, based on the seller's shares outstanding on Dec. 31. The price represents a 52% premium over Ben Franklin Financial's closing stock price on Monday.
The deal, which is expected to close in early 2020, is the latest in a wave of credit union-bank deals in 2019. In June, Verve in Oshkosh, Wis., said it was buying South Central Bank in Chicago.
“We feel this will be an excellent opportunity to provide even more individuals with the products and services CAFCU offers in furthering financial goals and dreams,” Peter Paulson, the credit union’s president and chief executive, said in the release.
When the deal closes, the bank's remaining assets will be dispersed among its shareholders, after all obligations are settled.
Ben Franklin Bank has two branches in the Chicago suburbs.
“We have spent a long time seeking to maximize stockholder value and believe that we have negotiated an outstanding transaction for our stockholders,” C. Steven Sjogren, Ben Franklin Financial's president and CEO, said in the release.
Ben Franklin Financial had been facing pressure from Stilwell Group, an activist shareholder and the company's biggest investor.
Stilwell, upset with the former mutual's financial performance, wanted it to consider selling. The investor, which owns about 9.9% of Ben Franklin Financial's stock, bought shares in the company in January "when the bank needed to raise capital," a Stilwell representative said in an email Wednesday.
Stilwell estimated that the sale priced Ben Franklin Financial at 121% to 125% of its tangible book value. The investor said it paid about 65% of book value for its original stake in 2015.