DOTHAN, Calif. (5/30/14)--In what an industry lawyer says is becoming a trend, the National Credit Union Administration Wednesday approved $260 million-asset Five Star CU acquisition of Flint River National Bank in Camilla, Ga.
The deal is expected to close in June, Michael Bell, attorney Howard & Howard, Royal Oak, Mich., who is representing Dothan, Ala.-based Five Star CU, told News Now.
"This is a great deal for everyone involved," Bell said. "The credit union acquires assets at a reasonable price and gains new customer/members. It's also a great deal for the community, which gains exposure to credit union's services.
Robert Steensma, president/CEO of Five Star CU, said the deal was "right in our wheel house." Five Star already has a presence in Georgia, and the acquisition of Flint River National Bank will allow the credit union to expand its agricultural lending portfolio.
"We will also offer the only free checking account in the area," Steensma told News Now. "There are four or five other banks in the area, but none of them offer free checking."
Since 2011, four other credit unions have acquired or are in the process of acquiring bank operations. Municipal Employees CU of Baltimore, with $1.2 billion in assets, took over operations of Advance Bank in December (News Now Dec. 4). GFA FCU, Gardner, Mass., with $409 million in assets, acquired Monadnock Community Bank in December 2012. United FCU, based in St. Joseph, Mich., with $1.6 billion in assets, purchased Griffith (Ind.) Savings Bank in December 2011.
In March, $2.3 billion Landmark CU, New Berlin, Wis., announced the completion of its planned acquisition of Hartford, Wis.-based Hartford Savings Bank.
Bell, who has served as attorney on four of what he calls cross-industry transactions, told News Now that more are in the works and other credit union acquisitions could involve other types of financial service providers such as loan companies and payday lenders.
"These deals are instantly profitable for credit unions," Bell told News Now. "Not only are they a source of growth, they bring credit union services to a new segment of the population to new communities that didn't previously have them. It's a very exciting development."