Illinois Credit Union Plans to Purchase 132-Year-Old Illinois Bank
Scott CU will pay $14.2 million to buy Tempo Bank in the industry’s 10th acquisition deal announced so far this year.
The $1.5 billion Scott Credit Union in Edwardsville, Ill., signed a definitive purchase and assumption agreement to acquire the $92.9 million Tempo Bank in Trenton, Ill., for $14.2 million in cash, the financial institutions announced in a joint statement Friday.
Founded in 1889, Tempo Bank’s 16 employees operate two branches that serve nearly 5,000 customers. Specializing in mortgage lending, the bank posted a net income of $1.5 million, and managed total deposits of $76.4 million and equity of $10.5 million at the end of the second quarter.
The acquisition of Tempo Bank’s assets includes its main office that also operates as a branch in Trenton and its branch in Breese, which will increase Scott CU’s footprint to 22 branches across the Metro East and St. Louis market area. The acquisition is part of the credit union’s strategic growth plan, which includes adding branches to serve members in Illinois.
“We are excited for the opportunity to partner with Tempo Bank and to improve access to our service in Clinton County,” Scott CU President/CEO Frank Padak said in a prepared statement. “Tempo Bank is a well-managed bank, and we believe its robust mortgage lending portfolio will be beneficial to the credit union as we continue making strides for our goal of long-term growth.”
The proposed transaction, unanimously approved by the board of directors of Scott CU and Sugar Creek Financial Corp., the holding company for Tempo Bank, is expected to close in the second quarter of 2022, pending approvals from Sugar Creek’s stockholders and regulators.
Sugar Creek’s stockholders are currently estimated to receive between $14.50 and $16.50 in cash in exchange for each share of Sugar Creek common stock owned. Currently, Sugar Creek has 790,701 shares of common stock outstanding.
Following the acquisition, Robert J. Stroh, Jr. chair, CEO and CFO of Sugar Creek Financial Corp. and Tempo Bank, said he intends to retire after more than 45 years of service. Scott CU said it intends to offer a consulting agreement to Stroh for a period of time after the deal is finalized. The bank’s employees will be retained by Scott CU.
The proposed purchase of Tempo Bank is the industry’s 10th acquisition so far this year. In 2020, there were six credit union bank acquisition agreements announced, and in 2019, 14 deals were announced.