Union bank

Illinois proves mergers and acquisitions is a hot spot with a pair of credit union and bank tie-ups

Two proposed acquisitions of Illinois banks by credit unions — in as many days — further cement the state as fertile ground for such deals.

Lombard, Ill., Credit Union 1 announced Friday it would buy substantially all of the assets and liabilities of Gurnee-based NorthSide Community Bank in a deal expected to close in the first quarter of 2023, at the latest.

This follows a day after Joliet Base NuMarkName Credit Union said it would acquire Earlville-based Pioneer State Bank in a deal expected to close in the fourth quarter of 2022, according to Credit union time and Olsen Palmer, a law firm advising Pioneer.

Taken together, they mark the eighth and ninth planned purchases of banks by credit unions this year — a notion tied to trade groups such as the Independent Community Bankers of America (ICBA), who argue that the tax-exempt status of credit unions allows them to offer a higher purchase price on acquisitions than banks, and allows them to expand more freely.

Credit unions bought a record 16 banks in 2019. But the pace of those deals has slowed since the covid-19 pandemic has begun.

Nevertheless, Michael Bell, one of the leading lawyers specializing in bank mergers and acquisitions, predicted a record “25 years and overagreements between credit unions and banks in 2022, according to American Banker. At the current rate, 2022 would see 21.

The value of either deal was not disclosed, but Olsen Palmer said the NuMark-Pioneer transaction was all cash.

The Credit Union 1 deal follows a recent pattern of credit unions expanding their presence in suburban Chicago to bolster their commercial loan portfolio. Based in Iowa green state Credit Union deepened its penetration of the nation’s third-largest market in October, agreeing to buy Midwest Community Bank and its subsidiary, blue leaf Ready.

“This acquisition for CU1 in the Chicagoland area perfectly complements our strategy of organic membership and asset growth through expanded products, services and technology,” Credit Union 1 CEO Todd Gunderson said in a press release. of Friday.

The acquisition of Northside, a $311 million asset across four locations, will give CU1 about $1.8 billion in assets when the transaction closes, the credit union said. Plans are underway to combine staff from the institutions, he added.

“With the size and scale that Credit Union 1 adds, it not only strengthens our ability to serve our existing customers in the way they expect, but also allows us to grow the number of businesses we can help develop into the new handset. partnership,” NorthSide CEO Patti Clausen said in Friday’s statement. “We are excited to be part of this exciting future.”

This week’s other deal in Illinois, however, represents a push out of town, as NuMark expands its footprint 50 miles west in a mostly rural part of the state.

The Pioneer, with assets of $135 million, operates four branches and a seasonal location. NuMarkName, meanwhile, counts 11, according to Credit Union Times. However, Olsen Palmer indicated NuMarkName will operate 13 locations once the transaction is completed.

NuMarkName did not explicitly disclose whether it plans to shut down any sites.

The transaction is set to develop NuMark’s total assets at $759 million, according to Olsen Palmer.

NorthSide and Pioneer aren’t the first Illinois banks to feature in credit union deals this year. Wisconsin-based CoVantage Credit Union said in April it would buy substantially all of the assets and liabilities of New Lenox, Illinois-based LincolnWay Community Bank.

This year, credit union-bank activity began in February and March, with a pair of agreements based in Georgia, one in Wisconsin, one in Arizona and another between a Louisiana credit union and a bank in Arkansas. After several weeks of relative calm, trading resumed in mid-May when Michigan-based DFCU Financial announced it would acquire Tampa, Fla.-based First Citrus Bank.