- Dearborn, Michigan-based DFCU Financial will acquire Tampa, Florida-based First Citrus Bank, it said in a press release Thursday.
- The purchase price has not officially been disclosed, but the deal, expected to close in the fourth quarter, could be worth about $105 million, according to the Tampa Bay Times.
- DFCU is the seventh credit union this year to announce its intention to acquire a bank.
The Southeast and Midwest are emerging as particularly attractive markets for mergers between credit unions and banks. DFCU is the third credit union based in the Midwest — after Wisconsin-based Summit Credit Union in March and CoVantage Credit Union in April — to announce intentions to acquire a bank in 2022. First Citrus would be the fourth Southeastern bank — after Georgia-based Vinings Bank and Persons Banking Company and Arkansas-based HomeBank — to be bought by a credit union this year.
The DFCU-First Citrus transaction would also be the second in the past year between a Michigan credit union and a Tampa bank. Grand Rapids, Michigan-based Lake Michigan Credit Union bought Tampa-based Pilot Bank in an estimated $100 million deal announced in June 2021.
DFCU will acquire First Citrus in an all-cash transaction, and First Citrus shareholders will receive $47.75 per share — a premium over the stock’s Wednesday closing price of $29.25, the Tampa Bay Times reported. DFCU will also cash out the target bank’s outstanding shares.
First Citrus oversaw $689 million in assets, $398 million in loans and $622 million in deposits as of March 31, according to the press release. The bank operates six branches across the Tampa Bay area.
The combined entity will have $7.1 billion in assets and almost $800 million in capital, and 33 branch locations in Michigan and Florida. That would make DFCU the second-largest credit union in Michigan, according to Credit Union Times.
“First Citrus represents DFCU's initial expansion into Florida and a significant increase in commercial lending presence and expertise," DFCU CEO Ryan Goldberg said in Thursday's press release, adding that the leadership of First Citrus' CEO "has fostered a customer-centric culture that closely aligns with DFCU's core values."
First Citrus CEO Jack Barrett is set to become DFCU's Florida market president after the deal closes, according to the press release.
"We're delighted that DFCU has chosen Tampa Bay as their Florida headquarters and honored they have entrusted our executive team to build upon their 72-year history,” Barrett said. “This merger is not only a win for our shareholders, it's a win for our associates, clients, Tampa Bay, and frankly, the state of Florida. DFCU's Midwestern values align well with ours. We are proud to fly the DFCU flag and look forward to raising it throughout our state!"
The credit union does not expect to close any First Citrus branches, according to the press release.
Trade groups such as the Independent Community Bankers of America (ICBA) have argued against deals between credit unions and banks, saying credit unions’ tax-exempt status allows them to offer a higher purchase price in acquisitions than banks can, and lets them grow more freely.
Credit unions announced they would acquire a record 16 banks in 2019. But the pace of those transactions has fallen off since the COVID-19 pandemic started.
However, Michael Bell, a leading bank M&A attorney, predicted a record “25-plus” deals between credit unions and banks in 2022, according to American Banker. So far, 2022 is on pace for 19.