Arizona Federal Credit Union Completes Pinnacle Bank Acquisition
The first credit union bank buy in the Grand Canyon State will expand AFCU’s mortgage, small business and commercial lending services.
The $1.6 billion Arizona Federal Credit Union in Phoenix said Monday it finalized the acquisition of the $269 million Pinnacle Bank also based in Phoenix.
The credit union said that the acquisition will provide members access to additional home loan and small business services, SBA financing options and commercial lending services.
Although financial terms of the deal were not disclosed, AFCU assured members in an online statement that its capital reserves of $301 million remain well in excess of “well capitalized” levels. The credit union noted that its validated financial modeling projections showed even in an unlikely worst case scenario, the safety and soundness of the credit union would not be threatened because of the bank acquisition.
Since 2017, AFCU has posted double-digit loan growth and ended the third quarter with an ROAA of 2.26% and a net worth of 17.53%, according to NCUA financial performance reports.
The credit union also assured its 127,888 members that it was not becoming a bank and remains committed to operating as a federally insured cooperative.
Though Pinnacle Bank has been in existence for only 14 years, it operates four branches in Phoenix, Tempe and Scottsdale and employs 60 staffers who serve about 2,200 customers.
Michael J. Thorell, former Pinnacle Bank chairman and CEO, will serve as the credit union’s president of commercial and residential lending. The bank’s 60 staffers will become AFCU employees. Pinnacle’s branches will expand AFCU’s branch network to 16 and grow its membership to more than 130,000.
“Now that the acquisition is legally complete, our teams will begin the next phase of work involving the consolidation and conversion of systems and services,” Ronald L. Westad, AFCU president and CEO, said. “We’re truly excited for our members and Pinnacle clients and look forward to providing additional products and services once our systems are converted later next year.”
This is the first time a credit union has acquired a bank in Arizona.