Iowa's Largest Credit Union Calls Off Proposed Acquisition of Nebraska Bank

Jeff Disterhoft, president/CEO of the $10.6 billion GreenState Credit Union, said Thursday the board of directors has decided to move away from the proposed acquisition of the $369 million Premier Bank.

Earlier this month, a state judge affirmed a decision of the Nebraska Department of Banking and Finance (NDBF) to deny an application for the Omaha-based bank to be acquired by the North Liberty, Iowa-based credit union.

Premier Bank CEO and Board Chair Chris Maher was highly critical of the regulator’s decision and the state’s banking lobby.

“The Nebraska Department of Banking joined forces with the state banking lobby to prevent the sale of a privately owned business. The process and court documents prove this,” Maher said Thursday. “It is to the detriment of all Nebraskans who would benefit from additional competition in their state. Regulators should concentrate on safety/soundness and consumer protection. Neither of those were an issue.”

This is the second credit union-bank buy deal that has been called off in two months.

In June, the $12.3 billion VyStar Credit Union in Jacksonville, Fla., and the $1.6 billion Heritage Southeast Bank in Jonesboro, Ga., said they mutually decided to terminate a purchase and assumption agreement, ending the credit union industry’s largest ever bank acquisition deal.

Although GreenState’s bank acquisition deal has ended, it won’t stop the credit union’s plans to enter the Nebraska market.

“We knew there would be a fight to allow GreenState entry into Nebraska via a bank acquisition, and we are disappointed by the outcome,” Disterhoft said Thursday. “While this is a small victory for the Nebraska Bankers Association, it is a loss for the Nebraska consumers in terms of consumer choice in banking. It also limits options for other banks who may wish to sell in the future. As for GreenState, we are still coming to Nebraska. This simply pushes our timetable back a year.”

Last year, the Nebraska Bankers Association (NBA) opposed Premier Bank’s proposed sale to GreenState. Lawyers for the bank and the NBA made their arguments before NDBF’s hearing officer, Jim Titus. In January, he denied the application of the bank to be purchased by GreenState.

Premier Bank appealed NDBF’s decision before Lancaster County District Court Judge Ryan S. Post.

Premier Bank argued that one of the powers of federally chartered banks doing business in Nebraska is the authority to sell substantially all of their assets and liabilities to a credit union. Premier, a state-chartered bank, claimed that if a national bank has this power, so too does a state bank.

But Judge Post sided with NDBF’s argument that while the wildcard rule allows a bank’s board of directors or officers to exercise all of the incidental powers necessary to conduct the business of banking, there is no specific power under the wildcard law to sell or buy bank assets.