VyStar Credit Union Plans to Buy Heritage Southeast Bank for $189 Million
The credit union industry’s largest ever bank acquisition is expected to close at the end of the year.
The $10 billion Vystar Credit Union in Jacksonville, Fla., agreed to buy the $1.5 billion Heritage Southeast Bank of Jonesboro, Ga., for $189 million, becoming the credit union industry’s largest-ever bank acquisition.
Under the terms of the purchase and assumption agreement, VyStar will pay the bank’s holding company, Heritage Southeast Bancorp. Inc., $27 per share in cash, according to a HSBI prepared statement.
HSBI records 7,018,165 shares outstanding.
When the OTC closed for business on Wednesday after which the Vystar acquisition was announced, HSBI’s stock was valued at $15 a share. By the end of OTC trading on Thursday, its stock soared to $25.30 As of Friday, HSBI’s share price was $25.35. Trading of the stock has been closed.
“Through the unique structure of this acquisition by VyStar, we believe we are maximizing value to our stockholders,” Leonard Moreland, HSBI CEO said in a prepared statement. “We look forward to working with VyStar to continue our tradition of fostering relationships to best serve our customers and having a positive impact in our local communities.”
Founded in 1955, HSB employs 288 people who operate 22 branches throughout southeast Georgia and Savannah, as well as the south and north Metro Atlanta areas and one branch in Jacksonville, Fla.
HSB currently serves a customer base approximately 90,000.
At the end of last year, the commercial, state-charted bank posted net income of $5.7 million compared to net income of $2.5 million at the end of 2019, though its net charge-offs totaled $1.1 million in 2020 compared to $435,000 in net charge-offs in 2019, according to the bank’s financials filed with the FDIC.
HSB recorded an ROA of 0.39% compared with at ROA of 0.30% in 2019, according to the FDIC. The bank’s capital totaled $181 million at the end of 2020.
“VyStar has made an ongoing strategic commitment to search for partnerships that help us bring the benefits of credit union membership to more people while reinforcing our position as a strong and reliable financial institution with better rates and lower fees for all our members,” VyStar President/CEO Brian Wolfburg said in a prepared statement. “HSB has exceeded our expectations as the optimal partner to help us expand our footprint and ensure financial services are accessible to more Georgia residents.”
When finalized, Vystar estimated the acquisition will bring the credit union’s total assets to approximately $12.5 billion, more than 85 full-service branches and members totaling more than 850,000.
Nationally, VyStar said it will move to the 13th-largest credit union in the country by asset size.
The transaction, which has been unanimously approved by the board of directors of HSB and VyStar, is expected to close late in 2021, subject to customary closing conditions, and the approval of HSBI stockholders and regulators.
This is VyStar’s second bank acquisition deal. In 2019, the credit union purchased the $279 million Citizens State Bank in Perry, Fla.
So far this year, this is the industry’s second proposed credit union bank acquisition.
In January, the $6.7 billion Wings Financial Credit Union in Apple Valley, Minn., agreed to acquire the $72.3 million Brainerd Savings & Loan in Brainerd, Minn. The transaction, which requires approval by state and federal regulators, is expected to close by May 31.