PHOENIX—The $2.8-billion Arizona FCU here has agreed to buy the $539-million Horizon Community Bank headquartered in Lake Havasu City, Ariz.
The acquisition marks the sixth CU purchase of a bank in 2022, all of which have been announced in the last few weeks.
The six-office Horizon has $259.9 million in total loans, $471.7 million in total deposits and $43.4 million in total equity, the bank reported.
Arizona Federal stated it will benefit from the deal by expanding into new market areas in western Arizona, further diversifying its assets, and adding talent and expertise.
Arizona Federal further said the acquisition will also help the credit union continue investments in new products and services and help fund the expansion of services to additional new markets throughout the state.
AFCU’s Second Bank Buy
It is the second time AFCU has purchased a bank. It purchased Scottsdale, Ariz.-based Pinnacle Bank in 2019.
“We believe that quality growth and diversification is essential to continued success in our industry, and we intend to achieve it both organically and through mergers or acquisitions,” said Ronald Westad, president and CEO of Arizona Federal.
Added Ralph Tapscott, president and CEO of Horizon Community, “Arizona Federal has demonstrated their competency and commitment to community banking and they will be a great partner for our bank. I’m excited for Horizon employees to join together with Arizona Federal employees to bring additional financial services and resources to the communities we serve.”
‘Long-Term Value’
AFCU said it operate each of the existing Horizon Community branches.
“We’re excited to welcome Horizon Community Bank clients as new members,” Westad added. “We believe this will create significant long-term value for all stakeholders.”
The transaction, which is subject to regulatory and shareholder approval, has been approved by the boards of directors of both institutions and is expected to be completed by the end of 2022.
The Financials
Horizon Community reported $5.9 million in net income in 2021, and $3.9 million in 2020, according to FDIC data. AFCU reported $15.8 million in net income in 2021, with net worth at 11.58%, according to call report data.
“The deal flow continues to be as strong as I have ever seen it,” said Michael Bell, a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP, which is representing AFCU. “More are coming. It’s great to see the free market working for the benefit of community banks, credit unions and their respective communities.”
Bell, the pioneer of credit union purchases of banks, has been involved in more than 45 whole-bank agreements, plus additional bank branch purchases.