DOTHAN, Ala.—Five Star CU here has signed an agreement to purchase the $47-million Farmers State Bank in Lumpkin, Ga.
If the deal is approved, the $318-million million Five Star will be 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.
This Farmers State deal awaits FSB shareholder approval, as well as regulator OKs—NCUA, FDIC, the Georgia Department of Banking and Finance, the Alabama Credit Union Administration, and the Alabama State Department of Banking.
Farmers State Bank and Five Star Wednesday signed a purchase and assumption agreement under which Five Star will purchase substantially all of the assets and assume substantially all of the deposits and other liabilities of FSB.
It is the intent of FSCU to purchase all loans, investments, real estate, accrued interest receivables, and other banking-related assets; and all deposits and accrued interest payables of FSB, the CU stated in a release. FSCU intends to continue to operate all three of FSB’s current branch locations after the proposed transaction is closed.
“We are excited to partner with FSCU in this transaction,” said Gary Blackburn, president/CEO of FSB. “Our Board considered a number of options and concluded that FSCU is best positioned to serve the needs of our market and that FSCU will be able to offer new and improved services to our customers. We feel this will be a great fit not only for our customers but for our employees who have contributed so much to our organization. FSCU is a credit union that is expanding and we are pleased to be a part of their growth strategy.”
Five Star President/CEO Bob Steensma said the CU is “pleased to have the opportunity to expand our market presence in southwest Georgia. We will welcome FSB’s customers and employees to the FSCU family and look forward to integrating ourselves into these additional communities in southwest Georgia.”
Michael Bell, attorney and counselor with Royal-Oak, Mich.-based Howard & Howard, is representing Five Star. Bell has been an integral part of four completed deals in which CUs have purchased banks.
“Five Star’s second deal certainly underscores a growing trend of credit unions buying banks, and there is a great deal of momentum here,” said Bell. “Expect more deals to break this year.”
In addition to Five Star’s FSB and Flint River deals, other CUs to buy banks in the last three years: $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; Massachusetts' $429 million GFA FCU bought New Hampshire's $83 million Monadnock Savings Bank; and the credit union that put everything in motion — Michigan's $1.6 billion United FCU — acquired $81 million Griffith Savings Bank in Indiana.