Decatur, Illinois-based Land of Lincoln Credit Union will acquire Nokomis Savings Bank in the state, the companies announced Friday.
The financial terms of the transaction — the second instance of a credit union purchasing a bank since January — were not disclosed. The deal is expected to close by March 2024, according to the companies’ statement.
The move will bolster Land of Lincoln with $25 million in assets, bringing its total to $482 million, and expand the credit union’s footprint with an added branch in Montgomery County.
“This acquisition is part of Land of Lincoln’s strategic growth plan, which includes adding branches and markets to better assist our members throughout Illinois,” Land of Lincoln CEO Robert Ares said. “Nokomis Savings Bank’s customers will become members of Land of Lincoln with full access to our wide array of products and services. We look forward to welcoming Nokomis Savings Bank’s customers and employees into our family.”
The transaction would be Land of Lincoln’s second proposed acquisition of a bank in the past six months. The credit union announced in December that it would buy Colchester State Bank. That all-cash deal is expected to close this quarter. The announcement came amid a flurry of deals — five in December alone — that drove 2022 to tie a record 16 proposed acquisitions of banks by credit unions.
This year, by contrast, has started markedly more slowly. By the end of April last year, six purchases of banks had been announced by credit unions.
“Many transactions are happening and in the process but some have paused (not stopped) due to market conditions,” Michael Bell, an attorney at Honigman, told Banking Dive via email.
The Land of Lincoln transaction also comes roughly a month after the Federal Deposit Insurance Corp. and the Illinois Department of Financial and Professional Regulation issued a consent order against Nokomis, alleging unsafe or unsound banking practices.
Nokomis has neither admitted nor denied the charges. The board, however, agreed to submit a strategic and profit plan to the regulators establishing the bank’s future direction, the order said.
The Land of Lincoln deal also breaks a three-month dry spell for bank-credit union tie-ups. Traverse City, Michigan-based 4Front Credit Union agreed in January to acquire the assets of Sault Sainte Marie-based Old Mission Bank and assume its liabilities.