Iowa Credit Union Plans to Buy Wisconsin Bank for $36 Million

The $2.6 billion Dupaco Community Credit Union Dubuque, Iowa, said Thursday it agreed to buy the $182 million Home Savings Bank in Madison, Wis. for approximately $36 million.

The boards of directors of both financial institutions have approved the proposed all-cash deal, which is structured as a definitive purchase and assumption agreement.

Home Bancorp Wisconsin, Inc., traded on the OTC exchange, is the holding company of Home Savings Bank, which estimates its stockholders will receive between $26.47 and $27.32 in cash for each share of Home Bancorp common stock they own. Total shares outstanding totaled $1.35 million at the end of the second quarter, according to the bank’s financials.

On Sept. 22, the bank’s stock was trading at about $16.55. By Oct. 1, the stock shot up to $24.14 and $24.75 on Monday.

Home Bancorp was created in connection with the 2014 mutual-to-stock conversion of Home Savings Bank. As a part the conversion, a liquidation account was created for the benefit of certain depositors of Home Savings Bank. It is anticipated that Home Savings Bank will pay out the balance of this liquidation account to the holders of sub accounts, according to a joint release.

The proposed transaction will expand Dupaco’s Wisconsin branch office footprint to Dane County, with the addition of the two bank branches in Madison, Wis., the credit union said in a prepared statement. Since 2002, Dupaco said it has operated a branch in Platteville, Wis. Dupaco’s 112-county field of membership already includes Dane County.

Established in 1895, Home Savings Bank specializes in commercial lending. The bank’s 23 employees currently serve approximately 4,800 customers.

The bank ended the second quarter of this year with a net income of $516,000 and it currently manages total liabilities of $164 million, $135 million in total deposits and equity capital of $18.2 million, according to Home Savings financials filed with the FDIC.

Home Savings’ ROA was 0.57% at the end of the second quarter.

“The bottom line is that on day one, the partnership will provide a positive financial return to all members of our cooperative, while simultaneously adding two branch locations to enhance service to the thousands of Dupaco members who live and work in southwest Wisconsin,” Dupaco Community President/CEO Joe Hearn said in a prepared statement.

If approved by the bank’s shareholders and credit union and bank regulators, the acquisition is expected to be completed in the second quarter of 2022. The core IT and member service conversion is expected to occur after the financial closing is completed.

This is Dupaco Community’s first bank acquisition and the industry’s 11th proposed credit union bank buy deal this year.

Currently, more than 600 Dupaco Community’s employees operate 19 branches that serve more than 143,000 members.