Iowa’s Largest Credit Union Plans to Buy Two Banks

Iowa’s largest credit union said it plans to buy two banks in neighboring Illinois and Nebraska that collectively manage assets of more than $1.1 billion.

The $7.4 billion GreenState Credit Union in North Liberty, Iowa, announced Tuesday that it entered into purchase and assumption agreements with the $759 million Oxford Bank & Trust of Oak Brook, Ill., which serves 20,000 customers, and the $383 million Premier Bank of Omaha, Neb., which serves 10,000 customers.

Financial terms were not disclosed.

GreenState President/CEO Jeff Disterhoft said the strong financials and geographic locations of Oxford Bank & Trust and Premier Bank are important to the credit union’s long-term growth strategy. It currently has more than 15,000 members in both states.

The credit union serves more than 271,000 members and operates 26 branches in the Hawkeye State. If the purchases of the banks are finalized, GreenState will also manage 10 additional branches in Illinois and Nebraska while its membership will expand to 300,000.

“Our strategy is to continue building upon historical growth strategy to best serve our member-owners, employees and the communities we collectively serve,” Disterhoft said in an email interview with CU Times on Wednesday. “We remain hopeful that growth will come in the form of both organic growth as well as a measured level of M&A activity.”

Although these deals were GreenState’s first bank purchase and assumption agreements, the credit union acquired seven branches and roughly $560 million of assets of First American Bank in Des Moines, Iowa in February 2020.

GreenState will purchase all of the assets and branches of both banks. This includes Oxford’s six branch locations in Addison, Naperville, Plainfield and Westmont, as well as the bank’s headquarters in Oakbrook; and all four of Premier Bank’s Nebraska locations, which are in Omaha and Nebraska City.

Founded in 1902 as Addison State Bank, Oxford Bank and its 110 employees manage more than $405 million in commercial and consumer loans and $635 million in deposits.

At the end of this year’s first quarter, Oxford Bank posted net income of $2.4 million and capital of nearly $71 million, according to the FDIC.

Premier Bank and its 50 employees manage nearly $300 million in deposits and a comprehensive range of deposit and loan products for both personal and business banking needs. The bank also runs a full-service, consumer mortgage loan department.

At the end of this year’s first quarter, Premier Bank posted $982,000 in net income and nearly $40 million in capital, according to the FDIC.

GreenState’s bank transactions are subject to regulatory approval and both are expected to close by the fourth quarter of 2021.

So far this year, this is the industry’s third and fourth proposed credit union bank acquisitions.

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. And in April, 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.