WABASH, Ind.—In a move that may be the first of its kind among credit unions, Beacon CU is planning to acquire Midwest AG Finance, an industrial loan and investment company based in Rushville, Ind.
The deal awaits final approval from the Indiana Department of Financial Institutions. The agreement includes the purchase of all Midwest assets and assumption of its liabilities. Midwest AG Finance is not a bank, as has been incorrectly reported in some media outlets.
The $1.1-billion, privately insured BCU—the largest agricultural lending credit union in the U.S.—has received approval for the acquisition from American Share Insurance.
Established in 1988, Midwest offers farm real estate, equipment, operating, FSA Guaranteed and commercial/agribusiness loans, crop insurance and equipment leasing.
“We are pleased to welcome the team of Midwest Ag Finance and their customers to the Beacon Credit Union family,” said Beacon CEO Kevin Willour. “Having developed an outstanding partnership with Midwest Ag finance for the past 15 years, we recognize that they bring with them a strong reputation in agricultural finance, and we believe our two business models fit very well together.”
For more than a decade, Beacon has partnered with Midwest and funded loans made by the company. The two institutions share a large number of customers/members.
“Our similar lending philosophies, along with the knowledgeable, experienced and adaptable staff from both organizations will provide for a smooth transition,” said Willour “This acquisition will expand Beacon Credit Union’s ability to provide quality agricultural-based financial services products to all corners of Indiana.”
Leading Agro-Loan Provider
Willour said the acquisition makes BCU the leading provider of agricultural-based loans, equipment leasing and crop insurance within Indiana.
“We started Midwest Ag Finance because we recognized that the agricultural community was in need of financial resources that were delivered in a consistent and dependable manner—whether in good times or bad times,” said Midwest President and Founder Jerry Nickel. “To ensure that this legacy continues, it was critical for us to find a partner that was not only a stable, dependable lender, but most importantly one that was deeply rooted in agriculture and shared this same vision. We can say with certainty that Beacon Credit Union is that partner. We take great pride in our brand promise of relationships, knowledge, and security of both farm and family, and these ideals will continue to be as common for customers going forward as they are today. Customers will see the same people and hear the same voices on the phone.”
Bacon will retain all Midwest staff and Nickel will join the BCU executive team. Midwest will be absorbed into Beacon and become a part of the credit union. However Beacon will operate the crop insurance portion of its business through its CUSO, Plan One Financial, Inc.
Beacon has performed well, turning profits of $8.3 million in 2011, $6 million the following year, $5.5 million in 2013 and $6.3 million last year. The CU’s capital has steadily remained near 15% over the last four years. Beacon held $195 million in MBLs at the close of December.
“This is a wonderful transaction for Beacon, the state of Indiana and the credit union industry,” said Michael Bell, attorney and counselor at Royal Oak, Mich.-based Howard & Howard, who is representing Beacon. “Midwest and Beacon are both exemplary Indiana institutions and this transaction assures that it will remain that way. This also provides further evidence for credit unions to examine non-organic growth opportunities. Beacon is a strong credit union and will become stronger through this transaction. This should be the first of a few announcements of this nature in 2015.”
Bell has also been an integral part of the four completed deals in which CUs have purchased banks.