POUGHKEEPSIE, N.Y.— In a first-of-its-kind transaction in this state, $7-billion Hudson Valley Credit Union here reported it intends to purchase $593-million Kingston, N.Y.-based Catskill Hudson Bank and its parent company Catskill Hudson Bancorp, Inc.
The credit union reported the deal has been approved by both boards of directors and should be closed by the second half of 2024.
The CU also shred that Catskill Hudson and Catskill Hudson Bank stockholders will receive $40.50 in cash for each share of Catskill Hudson common stock, representing aggregate consideration of approximately $28.6 million.
According to the credit union the merger accelerates HVCU’s growth in the Capital Region and Sullivan County and expands its business banking offering with an additional commercial book of business.
The deal will increase HVCU locations to 32 full-service branches and add corporate offices in the New York towns of Kingston, Middletown and Malta.
“This is an important moment in our growth story,” said Hudson Valley Credit Union President and CEO Jonathan Roberts. “Welcoming the Catskill Hudson customers and employees to the credit union will create a stronger institution than either of us were individually. Together, we will advance our mission by serving members in the northern counties of our current field of membership, and expand our service to include Sullivan County to the west.”
“It was extremely important for us to partner with an organization that shares similar values, and we found that in Hudson Valley Credit Union. I am confident that HVCU will bring many benefits to our employees and customers for years to come,” said Mario L. Martinez, chairman and CEO of Catskill Hudson Bank. “With Hudson Valley Credit Union’s deep breadth of financial products and services, our customers will have even more opportunities to thrive with a financial partner that puts their well-being at the forefront – just as we have done for the past 30 years.”
Under the merger agreement, Martinez will serve as a senior market president.
HVCU has 11.97% capital and made $15 million in net income through September of 2023, and $71.4 million in 2022, according to Call Report data. The bank made $546,000 through September of this year and $2.05 million in 2022, according to FDIC data.
The pioneer of CU purchases of banks, Michael Bell, said the agreement underscores how more credit unions, across the nation, are considering bank buys to expand.
"While this a first-of-its kind deal within the state of New York,I think it simply was a matter of time" said Bell, a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP., which Is representing HVCU. "Transactions of this nature are win-wins for the sellers and buyers. More importantly they are also safe and sound making them easily supportable from a regulatory perspective."
Bell has been part of more than 50 whole-bank agreements, plus additional bank branch purchases.