Teachers Credit Union to buy Michigan thrift

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Teachers Credit Union in South Bend, Ind., has agreed to buy New Bancorp in New Buffalo, Mich.

The $3 billion-asset credit union said in a press release Friday that it will pay $21.3 million in cash for the $120 million-asset parent of New Buffalo Savings Bank. The price could increase to $23.4 million if regulators allow Teachers Credit Union to assume a liquidation account currently maintained by New Buffalo.

The deal is expected to close in the second half of this year.

New Bancorp would be the first federal thrift to convert to stock ownership, then sell to a credit union, since the financial crisis.

The bank, adhering to regulations set by the Office of the Comptroller of the Currency, substantially restricted retained earnings when it converted in October 2015 by creating a liquidation account maintained for the benefit of eligible depositors. Those depositors would typically be entitled to a distribution when the bank is liquidated.

For that reason, Teachers Credit Union said it was unclear whether New Buffalo would be required to distribute those funds to its depositors.

It is the fifth M&A deal announced this year involving a credit union buying a bank. The other four sellers are based in Florida.

New Buffalo has three branches.

Teachers Credit Union said it expects to acquisition to add more commercial loans, including Small Business Administration credits.

“We are enthusiastic about our new partnership with TCU because of the expanded opportunities it brings to our customers, our employees and our community,” Richard Sauerman, New Bancorp's president and CEO, said in the release.

Keefe, Bruyette, & Woods and Luse Gorman represented New Bancorp. The credit union was represented by Boenning & Scattergood and Krieg DeVault.

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