Alabama Credit Union Agrees to Buy Security Savings Bank

The $1.2 billion Alabama Credit Union in Tuscaloosa said Wednesday it entered into a purchase and assumption agreement to buy the $38.9 million Security Federal Savings Bank of Jasper.

Financial terms of the all-cash deal were not disclosed.

The transaction will expand ACU’s footprint in north Alabama and increase its total assets to $1.3 billion.

Founded in 1971, Security Federal Savings is a full-service community bank that employs nine people who operate one branch and manage $31.6 million in deposits and $4.6 million in capital.

At the end of the second quarter, the bank posted a net income loss of $53,000 compared to a net income gain of $37,000 at the end of the second quarter of 2020, according to its consolidated Report of Condition and Income filed with the FDIC.

The transaction, which has been unanimously approved by the boards of directors of both institutions, is expected to be completed no later than the first quarter of 2022, pending regulatory approvals and an affirmative vote by the shareholders of Se-Fed Bancshares.

If the approvals are secured, ACU will become the fourth Alabama-based credit union to buy an Alabama bank. In 2016, the $1 billion Avadian Credit Union in Hoover completed its acquisition of the $112 million American Bank in Huntsville. In 2017, the $899 million Family Security Credit Union in Decatur bought the $24.4 million Bank of Pines Hill in Pine Hill, and in 2020, the $926 million Alabama ONE Credit Union in Tuscaloosa, signed a deal to purchase the $82 million First Bank of Linden.

“This is another step in our plan to enhance the member value and experience for our many existing members that live or work in Walker County,” ACU President/CEO Steve Swofford said in a prepared statement. “We also look forward to welcoming Security Federal Savings customers as new members of ACU and believe they will appreciate our approach of providing exceptional personal service along with additional financial products.”

ACU will retain the bank’s employees.

“We share many values and business philosophies that will enable this agreement to be a win for all parties involved,” Security Federal Savings President/CEO Todd Thompson said in a prepared statement. “It was also extremely important for us to partner with an organization as committed to supporting the local community in various ways, and Alabama Credit Union certainly has that reputation across the state.”

ACU’s proposed transaction is the credit union industry’s sixth bank acquisition so far this year. In 2020, there were six credit union bank purchase deals announced, and in 2019, 14 credit union bank acquisition agreements were inked.

In addition to the ACU deal, the $10.4 billion Lake Michigan Credit Union in Grand Rapids said in June that it planned to buy the $656 million Pilot Bank in Tampa, Fla., for $96.1 million in cash.

In May, the $7.6 billion GreenState Credit Union in North Liberty, Iowa, announced that it entered into purchase and assumption agreements with the $753 million Oxford Bank & Trust of Oak Brook, Ill., and the $378 million Premier Bank of Omaha, Neb.

In January, the $7.2 billion Wings Financial Credit Union in Apple Valley, Minn., agreed to acquire the $72.4 million Brainerd Savings & Loan in Brainerd, Minn. And in April, the $11 billion Vystar Credit Union in Jacksonville, Fla., agreed to buy the $1.6 billion Heritage Southeast Bank of Jonesboro, Ga., for $189 million, becoming the credit union industry’s largest-ever bank acquisition.