Michigan Credit Union to Buy Third Bank

The $1.7 billion Advia Credit Union in Parchment Mich. said Wednesday it plans to acquire the $149.9 million Golden Eagle Community Bank in Woodstock, Ill., which will be a part of the credit union’s growth strategy in Illinois and southern Wisconsin.

Financial terms of the proposed acquisition were not disclosed.

Established in 2007, GECB manages $131.5 million in deposits and posted a net income of $448,000 and an ROA of 0.57% at the end of June 2018, according to the FDIC.

Of the bank’s $118,757,000 total loan portfolio, $118,052,000 is financing mortgages, construction, land development, commercial and industrial loans, according to GECB financial reports filed with the FDIC.

In addition to its headquarters in Woodstock, the GECB operates two branches in Crystal Lake and Cary and employs 32 staff members. The acquisition will provide a combined 13 locations in Illinois and Southern Wisconsin, according to Advia, which operates 19 branches in Michigan and currently serves more than 153,000 members.

Cheryl DeBoer, president/CEO of Advia Credit Union, said the acquisition is expected to grow the credit union’s commercial-focused financial solutions, including commercial lending and deposit services, while also strengthening Advia’s local market position in Illinois and Wisconsin and its commitment to community involvement and volunteerism.

Although this is Advia first bank purchase in Illinois, it is the credit union’s third bank acquisition in three years. In 2016, Advia bought the $81 million Mid America Bank in Janesville, Wis., and in 2017, the cooperative purchased the $227 million Peoples Bank in Elkhorn, Wis.

Since it bank acquisitions, Advia’s total loans have increased from $790 million in 2015 to $1 billion in 2016 and $1.3 billion in 2017, according to NCUA financial performance reports. The credit union posted total loans of $1.4 billion at the end of this year’s third quarter.

A Filene Research Institute report released earlier this year indicated credit unions that have purchase banks have posted stronger financial metrics with higher capital ratios, greater returns on both assets and equity and lower loan net charge-off ratios than comparable-sized credit unions. What’s more, the report also said credit union executives plan to pursue new bank acquisition deals.

The proposed transaction, subject to regulatory and shareholder approvals, is expected to be completed during the second quarter of 2019, according to Advia.