- Crane Credit Union, a $635 million-asset financial institution, announced Thursday it is buying $89 million-asset Community State Bank of Southwestern Indiana.
- Crane, which has 14 branches, said it plans to continue operating all six of the bank’s brick-and-mortar locations.
- The credit union did not divulge the purchase price. The deal is expected to close this year.
The acquisition marks an uptick in credit union purchases of banks. There had been 32 such transactions in the seven years preceding a December hearing in which National Credit Union Administration (NCUA) Chairman Rodney Hood defended the trend in front of the House Financial Services Committee.
The pace of the acquisitions had been accelerating. A record 16 credit union-bank tie-ups were announced last year, nearly double the nine from 2018. However, the coronavirus — and weigh-in from the judicial branch, in one case — put a damper on bank takeovers by credit unions so far in 2020.
Crane's deal would be the third credit union acquisition of a bank this year. Wings Financial Credit Union, based in Apple Valley, Minnesota, agreed in February to buy $224 million-asset Neighborhood National Bank. Tinker Federal Credit Union in Oklahoma City agreed in April to buy $285 million-asset Prime Bank of Edmond, Oklahoma.
The pandemic last month 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. "Thankfully, while we regret the situation, Apollo and Suncoast amicably agreed that termination of the agreement was the most viable solution."
Johnson said the two entities could revisit the merger once the pandemic is over.
Another deal was stifled 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 tie-up, the Colorado Bankers Association wrote a letter arguing that credit unions can't be "authorized purchasers" of banks, according to language in state statutes.
Michael Bell, a lawyer at Howard & Howard in Royal Oak, Michigan, told Banking Dive that bank takeovers by credit unions were "not killed but paused" during the pandemic.
"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."
That's unwelcome news to the Independent Community Bankers of America (ICBA), which launched a campaign last fall aimed at ending the acquisition of taxpaying banks by tax-exempt credit unions.
The Crane deal is subject to approval by regulators and shareholders of Community State Bank. The acquisition would extend the credit union's reach westward in Indiana.