OSHKOSH, Wis.—Verve, a Credit Union said it plans to acquire South Central Bank NA, a $300-million community bank based in the Chicago area.
The acquisition of South Central Bank is expected to be finalized in the fourth quarter, pending regulatory approval. For the $936-million Verve, the South Central Bank purchase in just the latest in a number of CU mergers over the last three years.
Originally established in 1965 as a community bank, South Central Bank offers a full range of financial services and primarily focuses on business banking with five branches located in areas around Chicago, Verve said.
South Central Bank has relationships with more than 750 small businesses, many of them long-term, the CU added.
“Our commitment to supporting and growing our business customers led us to a partner who shares that same focus.” said Todd E. Grayson, president of South Central Bank. “This acquisition will allow us to continue to deliver products and services that our business customers expect from us. We are excited to gain additional resources that will help to drive their continued success.”
Focus on Business Lending
Verve, a Credit Union said the addition will not only boost its financial strength, but aligns well with its focus on business lending.
“Not only will this acquisition allow us to grow in a new thriving market but financially it makes sense for the entire membership of Verve,” said Kevin J. Ralofsky, president and CEO of Verve, a Credit Union. “South Central Bank is an extremely well-run bank and we look forward to expanding our field of membership and serving the Chicago market.”
“Credit union acquisitions of community banks have been accelerating over the past few years,” added Michael Bell, attorney and counselor with Royal Oak, Mich.-based Howard & Howard, who is representing Verve. Bell has pioneered these transactions and has been involved in a great majority of CU/bank deals.
Post-Merger Stats
After the acquisition is finalized, the combined organization will total over $1.2 billion in assets, operate 21 branches and serve nearly 66,000 members in 24 counties, the CU said.
South Central Bank has been marginally profitable in recent years, making $591,000 in net income in 2017, $830,000 in 2018 and $189,000 in Q1 2019, according to FDIC data.
Terms of the acquisition were not released.
Calling credit union acquisitions of banks a “disturbing trend,” the Independent Community Bankers of America recently announced the formation of a task force to “study” the purchases.