EAST LANSING, Mich.–For the second time in a week, a credit union has announced plans to reach across state lines to purchase a bank.
Michigan State University FCU said it has entered into a definitive agreement to acquire McHenry, Ill.-based McHenry Savings Bank from its parent company McHenry Bancorp, Inc. The bank is located approximately 275 miles west of the credit union, just north of Chicago. It marks the first bank acquisition by MSUFCU.
The transaction is structured as a purchase agreement with MSUFCU purchasing substantially all assets and assuming substantially all liabilities of the $322-million McHenry Savings Bank, according to the credit union.
The purchase follows on the heels of an announcement by Five Star Credit Union in Alabama that it is purchasing OneSouth Bank in Georgia, one of several banks Five Star has acquired in recent years.
In the MSUFCU acquisition, following the completion of the transaction, the credit union said McHenry Bancorp, Inc. will liquidate and dissolve and distribute its remaining assets to its stockholders.
What’s Being Paid for Shares
Terms of the purchase were not disclosed, but the parties said the shareholders of McHenry Bancorp, Inc. are expected to receive approximately $39-$41 in cash for each share of McHenry Bancorp, Inc. common stock, subject to adjustment based on McHenry Savings Bank's equity value at closing.
The acquisition will increase MSUFCU’s assets to approximately $8.2-billion, and increase its loan portfolio to approximately $6.3-billion. MSUFCU currently has approximately 348,000 members.
‘Major Expansion’ in Chicago
As CUToday.info reported earlier, MSUFCU had earlier announced plans for a “major expansion” in the Chicago market, with plans to open five branches in Chicagoland in 2024. The new branches will be located in the Lakeview, Lincoln Park, Wicker Park, Gold Coast, and Old Town neighborhoods. In addition to serving its current membership, there are more than 10,000 Michigan State University students and alumni living in the Chicago area, according to the credit union.
‘Adds Exponentially to Market’
"This transaction provides an excellent opportunity to further expand and complement our services in McHenry County and the surrounding Chicagoland area,” said MSUFCU President and CEO April Clobes. “MSUFCU has five branch locations in downtown Chicago and this adds exponentially to our growing market. We look forward to the combined synergies our two organizations will achieve in our local communities while providing McHenry Savings Bank's clients with an expanded array of resources and products."
‘Like-Minded Philosophy’
Added Donald H. Wilson, chairman, president and CEO of McHenry Savings Bank, in a statement: "We are excited about the opportunity to combine resources with MSUFCU and look forward to joining with a successful organization that is like-minded in its philosophy of offering highly personalized financial services and that has the financial capabilities to support further expansion.
“The transaction allows us to continue to serve our customers and communities while becoming part of a growing and dynamic force in Chicagoland banking. We clearly see the benefits for our clients, and look forward to joining the MSUFCU team. For our shareholders this represents the culmination of the turnaround process begun in 2018, and we appreciate their support during the process."
Timing of Deal
The transaction is anticipated to be completed in the late first quarter of 2024 subject to receiving all required regulatory approvals, approval by the shareholders of McHenry Bancorp, Inc., and other customary closing conditions, according to the two parties.
Michigan State University FCU said it was advised in the transaction by Piper Sandler & Co as exclusive financial advisor, and Luse Gorman, PC as legal counsel. McHenry Bancorp, Inc. was advised by Janney Montgomery Scott LLC as financial advisor and Godfrey & Kahn, S.C. as legal counsel.
Expansion Event Held
Earlier this week, MSUFCU celebrated its expansion into Chicago with an event o at one of the spaces it soon will be occupying. The expansion event at 1550 N. Clark St. in Chicago included remarks by Clobes, in addition to Board Chair Greg Deppong, Chicago Spartans President Fawn O’Brien, MSU AVP Nick McLaren and SmithGroup Design Principal Bob Varga.
Leading up to and following the event’s formal remarks, attendees were entertained by a local jazz quintet, enjoyed food and refreshments from Café Ba-Ba-Reeba!, and were visited by MSU mascot Sparty.
Additionally, a $15,000 donation was made to 3Arts, a nonprofit organization that supports Chicago’s women artists, artists of color, and Deaf and disabled artists who work in the performing, teaching, and visual arts. By providing cash awards, project funding, residency fellowships, professional development, and promotion, 3Arts helps artists take risks, experiment, and build momentum in their careers.
“It is important for MSUFCU to not only support our members, but the surrounding community,” Clobes said. “The mission of 3Arts aligns with the pillars and mission of MSUFCU’s Desk Drawer Fund to help create jobs, teach valuable skills, and improve the overall quality of life in communities.”
How to Get the Daily CU News Headlines In Your Inbox Each Day, For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.