DECATUR, Ala.—Family Security Credit Union here has agreed to purchase the Bank of Pine Hill, located in Pine Hill, Ala.
As CUToday.info was first to report, the $580-million credit union will substantially purchase all of the assets and assume the deposits of the one-office, $25-million bank. State and federal bank and CU regulators still need to approve the deal, which is expected to close in the first quarter of 2017.
“As a member-owned financial institution, we are excited to welcome the Bank of Pine Hill customers as members and look forward to serving their financial needs,” said Shane Nobbley, president and CEO of Family Security. “We share a common philosophy with the Bank of Pine Hill and believe their customers will find a familiar level of personal service and desire to help them achieve their goals while having access to a wider array of financial products and services.”
“Family Security is a great partner for our customers,” said L. William Godbold, chairman, president and CEO of Bank of Pine Hill. “As a larger financial institution, but one still focused on the local community, it is able to offer a wider range of products and does so at competitive rates with low fees. For our shareholders, this transaction offers a good outcome which reflects the solid capital position of the bank. We look forward to working with the staff of Family Security over the next several months to ensure a smooth transition for our customers, employees and the community at large.”
Stable Assets
Family Security Credit Union has 20 offices throughout Alabama, and serves more than 70,000 members.
The nine-employee Bank of Pine Hill was founded in 1947 and is privately held. According to FDIC data, the bank’s assets remained relatively stable in the last year, while the bank lost $63,000 in 2015 and $25,000 through March of this year.
“This transaction is further evidence that forces inside and outside of the CU industry drive these deals,” said Michael Bell, attorney and counselor with Royal-Oak, Mich.-based Howard & Howard, who is representing Family Security. “It’s very difficult to be a small bank today and credit unions offer small banks a real solution and exit strategy. A solution that is good for the bank’s owners, employees and the community. There are more deals in the works—credit unions buying banks—and a few more should be announced prior to the end of 2016.”
Bell has been part of ten CU/bank deals, including one merger of a bank into a credit union.
If the Family Security deal is finalized, it will be the 11th time a credit union has acquired a bank since 2011, when Michigan's $1.6-billion United FCU pioneered such purchases by acquiring $81-million Griffith Savings Bank in Indiana.
CU/Bank Deals
Earlier this year the $1.2-billion Advia CU announced plans to acquire the $84-million Mid America Bank in Janesville, Wis. Last year the $607-million Avadian Credit Union in Birmingham, Ala., signed an agreement to purchase the $127-million American Bank of Huntsville, located in Huntsville, Ala. Also in 2015, the $1.8-billion Royal CU in Eau Clair, Wis., agreed to acquire Capital Bank in Saint Paul, Minn. And the $1.1-billion Achieva CU, Dunedin, Fla., signed an agreement to acquire the $165-million Calusa Bank based in Punta Gorda, Fla. The deal marked what is believed to be the first time in history a credit union merged with a bank, rather than do a purchase-and-assumption.
In addition to the United, Advia, Achieva and Avadian agreements, the other CU/bank deals to date: The $318-million Alabama-based Five Star CU purchased the $23-million Flint River National Bank in Camilla, Ga., and closed a deal with $47-million Farmers State Bank in Lumpkin, Ga.; the $1.2-billion Municipal Employees CU of Baltimore purchased local $61-million Advance Bank; Wisconsin's $2.1-billion Landmark CU acquired $190-million Hartford Savings Bank; and Massachusetts' $429-million GFA FCU bought New Hampshire's $83-million Monadnock Savings Bank.