A union-oriented insurance and investment company is getting into the banking business.
Ullico Inc. of Washington announced Thursday that it would buy the $600 million-asset Amalgamated Bank of Chicago for an undisclosed amount. Amalgamated would become a subsidiary of Ullico but would retain its name, charter, employees, and site in downtown Chicago.
The deal is expected to close in the first quarter.
"This is not your typical bank-on-bank merger," said Jim Landenberger, Amalgamated's executive vice president. "This is actually two different industries combining."
Over the long term, Mr. Landenberger said, the bank plans to expand its branch network nationwide and offer a wide range of financial services to unions and their members. "Hopefully we will expand geographically and eventually create a kind of a national labor bank," he said.
Amalgamated, one of a handful of banks that targets organized labor, was founded in 1922 by the Amalgamated Clothing Workers Union, which also started Amalgamated Bank of New York. In 1966 a group of private investors bought control of the Chicago bank, which remains 5% union-owned.
The Chicago bank's longtime president, Robert Wrobel, would remain in that post after the deal closes.
Ullico also has served unions since it opened its doors in 1925 as Union Labor Life Insurance Co. Its products include a variety of life, health, and commercial policies, as well as investment services such as portfolio management for pension funds.
The deal between the two companies, with their similar focus, would be "a perfect fit," said John Rodgers, the insurance company's spokesman. "It enlarges our ability to get customers, and the bank expands its operations," he said.
Ullico has been looking to expand into banking for several years, Mr. Rodgers said. When the Gramm-Leach-Bliley Act was passed last fall, allowing insurers, banks, and brokerages to combine, Ullico went to Amalgamated with the deal proposition.
Mr. Landenberger said the bank was immediately interested because a partnership with Ullico could give it the additional capital needed to fund growth.
Ullico needs Federal Reserve Board approval for the deal.