Editor's Note: This story has been updated since initial reporting to reflect the terms of the deal.
ANCHORAGE, Alaska—In a deal that represents the largest bank purchased by a credit union to date, the $11.8-billion Global FCU here announced it intends to buy $1.5-billion First Financial Northwest Bank based in Renton, Wash.
According to the organizations, the transaction is structured as a purchase and assumption agreement with Global purchasing substantially all assets and assuming substantially all liabilities of First Financial Northwest Bank for the all-cash consideration of $231.2 million, subject to certain adjustments.
The deal is the second such acquisition to be reported this week, following Hudson Valley Credit Union’s announcement it is purchasing the $593-million Catskill Hudson Bank.
Global Credit Union, which had net worth of 9.34% through Sept. 30, posted a $211,000 loss through the end of the third quarter, according to call report data. The CU reported net income of $68.8 million in 2022.
First Financial reported net income of $5.9 million through Sept. 30, and $14.7 million for all of 2022, according to FDIC data.
'Enthusiastic' About Deal
"We are enthusiastic about combining two financially sound institutions that share a strong commitment to service and community engagement,” Geoff Lundfelt, president and CEO of Global FCU said in a statement. “This combination will continue to enhance service delivery and growth in a market that the credit union has been operating in for over four decades, adding numerous branches. First Financial Northwest Bank’s branch network has a technology-forward design, accelerating the transformation to an environment with a structure and atmosphere more suited to conducting business in the future.
“The ability to offer expanded business and commercial financial products and services to Global’s existing membership is a significant strategic step for the credit union,” continued Lundfelt. “This acquisition also affords the customers of First Financial Northwest Bank access to the consumer products and world-class service Global members currently enjoy. Global will receive tremendous value from this transaction. The projected future earnings from the acquisition of First Financial Northwest Bank’s franchise justify the pricing of the transaction and are expected to be accretive to Global from a financial perspective.”
The organizations said the transaction is anticipated to be completed in the fourth quarter of 2024 subject to receiving all regulatory approvals, approval by the shareholders of First Financial Northwest, and other customary closing conditions.
Merger Helped Create Larger CU
Global Credit Union represents a merger completed in 2021 between what was then the $571-million GCU, headquartered in Spokane, Wash., and the then $10.3-billion Alaska USA FCU.
The purchase of a billion-dollar bank is not the first such announcement of a deal. In April of 2021, the Jacksonville, Fla.-based VyStar Credit Union announced it intended to buy $1.5 billion Heritage Southeast Bank, based in Jonesboro, Fla. However, the deal was never completed. At the time of the announcement VyStar had $11 billion in assets.
An Active Year
The pioneer of CU purchases of banks, Michael Bell, told CUToday.info that 2024 will be an active year for CU/bank buys.
“These happen via a choice by buyers and sellers and only occur when both get a win. There are no involuntary or hostile takeovers here, just two parties finding value for their stakeholders,” stated Bell, a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP., which Is representing Global.
Bell has been part of more than 50 whole-bank agreements, plus additional bank branch purchases.
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