Arizona Federal Credit Union Plans State’s First Bank Acquisition

The $1.6 billion Arizona Federal Credit Union in Phoenix intends to buy the $236 million Pinnacle Bank in Scottsdale, making it the first credit union bank acquisition in that state and the seventh transaction in the nation since January.

Financial terms of the deal were not disclosed.

Pinnacle Bank posted $209 million in deposits, $351,000 in net income and an ROA of 0.61%, according to its first quarter financials filed with the FDIC.  The bank also manages $26.3 million in capital.

Though the bank has been in existence for only 14 years, it operates four branches and employs 60 staffers who serve about 2,600 customers.

In an online announcement to AFCU members, President/CEO Ronald L. Westad noted the bank acquisition would provide additional mortgage services, such as construction to permanent financing and jumbo mortgages, and expanded small business services, SBA financing options and commercial lending services.

“The transaction, which is subject to regulatory and Pinnacle Bank shareholder approval, is expected to be completed in the fourth quarter of 2019,” Westad said. “Once complete our combined organization will have more than $1.8 billion in assets and serve over 127,000 members throughout the Valley of the Sun.”

If the transaction is approved, the credit union’s branches will expand from 12 to 16 throughout the Metro Phoenix area, one of the fastest growing regions in the nation, according to the U.S. Census Bureau. AFCU’s number of staff will increase from 443 to 503.

Later this year, Westad said the credit union plans to hold town-hall style meetings where current and future members can meet the leadership team, ask questions and provide feedback.

AFCU is the state’s fourth largest credit union by assets and fifth largest by members.

In addition to AFCU’s proposed transaction that was publicly announced on June 3, five credit union bank acquisitions are pending in Florida and one in Indiana.