GRAND RAPIDS, Mich.—Lake Michigan Credit Union here has agreed to purchase a branch of CCF Bank, a subsidiary of Citizens Community Bancorp.
The Eau Clair, Wis.-based CCF Bank is selling its Rochester Hills, Mich., branch and related liabilities to the $5.9-billion CU. The purchase and assumption agreement includes approximately $35 million in deposits and approximately $300,000 in fixed assets, the credit union reported.
LMCU has agreed to pay a 7% deposit premium, or approximately $2.45 million. All loans associated with the branch will remain with CCF Bank, the CU said.
In the short term, the bank said it plans to use Federal Home Loan Bank borrowings to fund the sale of the deposits.
“We are happy to add this important branch location in southeast Michigan to our growing branch network. This new branch will allow us to bring our full suite of value rich products and services to the people of Rochester Hills and the surrounding area,” said Sandy Jelinski, president and CEO of Lake Michigan Credit Union. “As the largest credit union in Michigan, it’s important for us to continually identify service opportunity gaps to strengthen our market position. We extend a warm LMCU welcome to the staff and customers of CCF Bank.”
Realignment Drives Decision
“The sale of our Michigan location will realign our branch network to northwest Wisconsin and southern Minnesota and reflects a good value to shareholders from the branch sale,” said Steve Bianchi, president of CCF Bank and Citizens Community Bancorp, Inc. “Our employees and customers will benefit from LMCU’s strong reputation as an outstanding place to work and bank. We are pleased with the outcome for all of our constituencies.”
The purchase of the branch is subject to state and federal regulatory approval, and is expected to be completed in the second quarter of 2019. The branch will continue operating as CCF Bank until the transaction is completed, the bank stated.
“A bank branch purchase transaction offers a nice supplement to planned organic growth of a CU’s branch network. It accelerates that growth by providing a branch full of customers in day one instead of having to build a customer base over time,” said Michael Bell, attorney and counselor at Royal-Oak, Mich.-based Howard & Howard, who represents Lake Michigan CU and who has been part of 24 CU/bank deals, including three mergers of a bank into a credit union.