ST. JOSEPH, Mich. – The first credit union to acquire a bank is at it again.
The $3.2-billion United Federal CU here has agreed to purchase local $228-million Edgewater Bank, the credit union reported.
In 2011, United FCU acquired $81-million Griffith Savings Bank in Indiana, marking the first time a CU has acquired a bank. More than 35 such deals have since followed.
“This collaboration is all about the community," said United President and CEO Terry O'Rourke, who expects the acquisition to be finalized in the spring of 2021, pending regulatory and bank shareholder approvals. "Our two organizations are 100% committed to local decision making, local investment and local involvement and we both want to fortify that real local focus. Together, we can do more for the financial well-being of everyone that calls Southwest Michigan home.”
Added Edgewater President/CEO Rick Dyer, “Our two organizations share the same core values and have similar cultures, That’s why we are calling this partnership the ‘Real United’ campaign. Our teams understand what it means to take care of our customers and members and how to exceed their expectations for service. Rather than continue competing for local business, employees and resources, it makes the most sense to combine our expertise to truly be the most dynamic, financial force in our local communities. This is real local progress.”
O’Rourke said Edgewater customers will gain access to more technology, knowledge, products and services as well as other United membership perks. However, many things in the local financial landscape will stay the same, according to the bank. All of Edgewater's branches will remain open, with the exception of one branch. Due to its proximity to United’s Buchanan branch, Edgewater’s Buchanan branch and its employees will be consolidated into the United office, O’Rourke said.
“We want Edgewater customers to know that they can expect to maintain the same local relationships they have with the commercial lending officers and employees they have come to value and trust,” said O’Rourke. :That includes Rick Dyer, who will have a leadership and decision-making role as community president within United once the transaction is done.”
“I will remain actively involved in local decision making,” said Dyer. “You will continue to see me and other Edgewater team members advocating for and working in the best interests of everyone in our area.”
Business As Usual
O’Rourke and Dyer said until approvals are complete, it will be business as usual for both organizations.
“This is a partnership of minds and ideas, of ideals and values, of resources, talent and community spirit,” said O’Rourke. “Unifying the 110-year-old ‘Real Local Bank’ with United, a credit union with over 70 years of local community service, will give our customers, members and communities more.”
Edgewater Bank has been marginally profitable, making $1.3 million in net income in 2019 and $787,000 through June of 2020.
“This is a superb transaction for many reasons, and it is somewhat of a milestone in this history of credit unions buying banks. United had the courage to begin this process, and now they see value in doing it again,” said Michael Bell, a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP, Kalamazoo, Mich., which is representing United. “Personally, UFCU and I worked together to pioneer the first-ever whole bank acquisition and it’s wonderful to do this together again. This is a precise example of a win-win for a selling community bank and a buying credit union. Customers, communities and employees all win in this deal.”
Bell has been involved in more than 36 such deals plus additional bank branch purchases.