- Crane Credit Union is buying its second bank of the year, saying Wednesday it would purchase Spencer, Indiana-based Our Community Bank from Home Financial Bancorp in an all-cash transaction.
- The acquisition marks the fifth credit union-bank tie-up of 2020 and the third in the Hoosier State alone. Newburgh-based Heritage Federal Credit Union said last month it would acquire the branches of The Elberfeld State Bank. And Crane in June said it would buy Poseyville-based Community State Bank of Southwestern Indiana.
- The deal, subject to approval by regulators and Home Financial shareholders, is expected to close next year. Our Community Bank has $74 million in assets, including $52 million in loans and $56 million in deposits, according to American Banker.
Crane will pay $10.75 to $11.25 a share for the bank — up to 43% above Home Financial's book value, the credit union said. But the deal appears to be motivated at least partly by geography.
"By teaming with OCB, we will expand our services to Owen and Putnam Counties, which fit within our existing market areas stretching from the Greater Indianapolis area down to Evansville," Kevin Sparks, Crane's president and CEO, said in a press release Wednesday.
The acquisition of taxpaying banks by tax-exempt credit unions spurred at least one trade group, the Independent Community Bankers of America (ICBA), to launch a campaign last fall aimed at curbing the once-accelerating trend.
Credit unions bought 32 banks in the seven years preceding a December hearing in which National Credit Union Administration (NCUA) Chairman Rodney Hood defended credit union growth in front of the House Financial Services Committee. But half of those deals came in 2019, compared with nine the previous year.
The coronavirus has since put a damper on credit union-bank tie-ups. The pandemic in May scuttled Tampa, Florida-based Suncoast Credit Union's planned acquisition of Miami's Apollo Bank. "The COVID-19 virus changed the value of our agreement and left us with an unpredictable future," Suncoast CEO Kevin Johnson said, adding the two entities could revisit the merger once the pandemic is over.
Weigh-in from the judicial branch stifled another deal in January, when the Colorado Banking Board rejected Elevations Credit Union's attempt to buy Cache Bank & Trust. Just days before the board was set to vote on the acquisition, the Colorado Bankers Association (CBA) wrote a letter arguing that credit unions can't be "authorized purchasers" of banks, according to language in state statutes.
The pandemic has "not killed but paused" bank takeovers by credit unions, Michael Bell, a lawyer at Howard & Howard in Royal Oak, Michigan, told Banking Dive in May.
"Depending on when [the outbreak] ends, I expect all of those things that are paused to heat right up," he said. "So either the end of this year will be really busy or 2021 will be busier than it was going to be."
Outside of Indiana, there have been just two bank acquisitions by credit unions this year. Tinker Federal Credit Union in Oklahoma City agreed in April to buy $285 million-asset Prime Bank of Edmond, Oklahoma. Two months earlier, Apple Valley, Minnesota-based Wings Financial Credit Union agreed to buy $224 million-asset Neighborhood National Bank.