EAU CLAIRE, Wis.—In what has been a busy week, another credit union is buying a bank outside its home state.
The $3.7-billion Royal Credit Union here has agreed to purchase $500-million Lake Area Bank in Lindstrom, Minn.
As CUToday.info reported, the $7.5-billion GreenState Credit Union in North Liberty, Iowa, agreed in June to simultaneously buy two separate banks in two states outside of Iowa—the $345-million Premier Bank in Omaha, Neb., and the $731-million Oxford Bank & Trust based in Oak Brook, Ill.
Royal Credit Union’s move marks the busiest period ever for CU purchases of banks—three deals in the past seven days.
Royal reported the credit union will acquire all of Lake Area’s offices, located in Forest Lake, Hugo, Lindstrom, Stillwater, and White Bear Lake in Minnesota. Terms of the agreement were not disclosed.
Pending regulatory approvals, the deal is expected to close in the first quarter of 2022.
Lake Area Bank made $14.7 million in net income in 2020, and $2.9 million through March of this year, according to FDIC data. Royal CU reported net income of $25.9 million in 2019, $28.5 million in 2020, and $41.6 million through the first half of this year, NCUA Call Report data show. The CU’s net worth this year stands at 9.47%, membership growth is 5%, and ROAA stands at 2.31%.
‘Excited’ for Opportunity
“Royal is excited for the opportunity to bring our value proposition and commitment to making a positive impact in the lives we touch to expanded areas in Minnesota,” said Brandon Riechers, Royal Credit Union’s president and CEO. “Lake Area Bank is a family-owned financial institution that has served the community for over 100 years. Royal’s values-driven and relationship-based approach to financial management made this acquisition a good fit for our credit union.”
Added Lake Area Bank President and CEO Marc Campbell, “Lake Area Bank is proud of our 100+ year history as a community bank serving customers and our local communities. Royal Credit Union shares our values and commitment to service, and we look forward to providing continued excellent service for many years to come.”
Royal isn’t new to bank buys. In 2016 the credit union expanded in the Minnesota market through the acquisition of a Deerwood Bank branch in Apple Valley and Capital Bank in Saint Paul.
Non-Organic Growth
“Royal Credit Union is also no stranger to non-organic growth and it has benefitted from transactions with banks and with credit unions over the years,” said Michael Bell, the pioneer of CU purchases of banks and a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP, which is representing RCU.
Bell has been involved in over 45 whole-bank agreements, plus a myriad of bank branch purchases.