Five Star Completes Farmers State Bank Deal


Bob Steensma, Five Star

DOTHAN, Ala. – Five Star Credit Union has completed the purchase and assumption of Farmers State Bank.

The $345-million million Five Star is the first credit union to buy two banks. Last year Five Star completed the purchase of the $23-million Flint River National Bank in Camilla, Ga.

The $47-million Farmers State Bank, whose headquarters were in Lumpkin, Ga., brings that location and two more to Five Star.

Five Star was recently granted an expansion to its community charter to include all residents of Stewart and Webster County, Georgia. Five Star now has community charters serving all residents of 18 Alabama and Georgia counties.

“We welcome the present customers of Farmers State Bank as new Five Star Credit Union members” said Bob Steensma, president and CEO of the credit union. “All qualifying customers of the bank will automatically become credit union members.”

Steensma told that both bank deals have gone well.

“There is opportunity in our market for these kinds of deals,” said Steensma. “If another opportunity presents itself—and we think there are more—we will consider them. But the deal has to be good for Five Star and our members.”

The next step for Five Star, said Steensma, is converting the bank’s core system over to the CU’s Symitar system, which will begin in the next few weeks.

Michael Bell, attorney and counselor with Royal-Oak, Mich.-based Howard & Howard, said bank buys will continue to be used by credit unions to expand.


Michael Bell, Howard & Howard

“With tight margins, more regulations and no viable supplemental capital mechanisms, the importance of non-organic growth continues to increase,” said Bell, who represented Five Star in both deals. “Acquiring a bank is now a proven form of non-organic growth for credit unions.”

Farmers State marks the seventh time a credit union has purchased a bank since 2011, when Michigan's $1.6-billion United FCU pioneered such purchases by acquiring $81-million Griffith Savings Bank in Indiana.

In addition to the United deal and Five Star’s buys of Farmers and Flint River, the other CU/bank deals to date: the $607-million Avadian Credit Union in Birmingham, Ala., signed an agreement in August to purchase the $127-million American Bank of Huntsville, located in Huntsville, Ala.; the $1.2-billion Municipal Employees CU purchased $61-million Baltimore-based Advance Bank; Wisconsin's $2.1-billion Landmark CU acquired $190-million Hartford Savings Bank; and Massachusetts' $429-million GFA FCU bought New Hampshire's $83-million Monadnock Savings Bank.

In May, the $1.1-billion Achieva CU, Dunedin, Fla., signed an agreement to acquire the $165-million Calusa Bank based in Punta Gorda, Fla.

Bell has been part of six CU bank buys as well as the Achieva merger.

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Copyright Year: 2019
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