OAK RIDGE, Tenn.—The $2.15-billion Y-12 FCU has agreed to buy $415-million First State Bank of the Southeast, based in Middlesboro, Ky., Y-12 reported.
The agreement marks the 19th CU purchase of a bank this year. The deal is expected to close in early 2025.
As CUToday.info reported, the record for these deals was set early this month when OneAZ Credit Union agreed to buy 1st Bank Yuma. That purchase marked the 17th of the year, topping 2022’s record by one.
“The addition of FSB allows us to expand our footprint and bring the benefits of credit union membership to Southeast Kentucky,” said Y-12 FCU President/CEO Mark Ziegler. “We’re excited to welcome FSB customers and employees into the credit union philosophy of ‘people helping people.’ By combining our strengths, we can offer even more personalized service and financial opportunities, while continuing to invest in community initiatives that positively impact East Tennessee and Southeast Kentucky.”
"FSB is my family’s legacy, and I am enthusiastic about partnering with a strong financial institution like Y-12 Credit Union,” said FSB Chair/CEO Katherine Reese. “By combining the strengths of both organizations, we will bring expanded opportunities to our customers, employees, and communities, backed by greater financial resources and advanced technology. Together, we’re delivering the best of both institutions while maintaining the family-oriented culture we’ve built. Y-12 Credit Union’s dedication to its employees, demonstrated by multiple Top Workplaces Culture Excellence Awards, aligns perfectly with our mission and core values.”
Performance Data
First State Bank made $4.1 million in net income last year and $1.8 million through June of ’24, according to FDIC data. Y-12 made $23.8 in net income in 2023 and $12.4 million through June, according to Call Report data. The CU’s net worth is 12.07%.
The pioneer of CU purchases of banks, Michael Bell, emphasized the pace of these agreements this year addresses concerns from those who say the deals are bad for communities.
“If they were not good deals for all sides—the credit unions, the banks and the communities, we would not be on pace for what is going to be a year that breaks the record by a respectable number,” said Bell, a partner and chair of the Financial Institutions Practice Group at Honigman, LLP, which is representing Y-12.
Bell has been part of more than 65 whole-bank agreements, plus additional bank branch purchases.