Pima FCU to Acquire Republic Bank of Arizona

Officials with the Tucson, Ariz.-based Pima Federal Credit Union and RBAZ Bancorp, Inc. in Phoenix announced the two organizations had entered into a definitive agreement for Pima to acquire “substantially all of the assets” and liabilities of the Republic Bank of Arizona in an all-cash transaction.

Details of the announcement, which came late Thursday, stated the $1.2 billion Pima would take over all customers and accounts of the Republic Bank of Arizona. Once the transaction is complete, bank officials said they intend to wind down and dissolve the bank and its holding company RBAZ Bankcorp, Inc. Shareholders are expected to receive “approximately $22.00 per fully diluted share upon final liquidation” pending various adjustments.

The purchase and assumption agreement has been unanimously approved by the Boards of Directors of both organizations. “The combination is subject to approval by RBAZ’s shareholders, applicable regulators, and other customary closing conditions,” the statement read. Officials said they expect the transaction to be completed during the second half of 2024.

Eric Renaud, president/CEO of Pima, said, “We are happy to announce our entrance into Phoenix and Maricopa County through this partnership with Republic Bank. This strategic move is not only rooted in our shared values but also aligns with our growth objectives, presenting an exceptional opportunity to enhance our service to the local community. We are excited to bring our commitment to excellence and dedication to the businesses and people of Maricopa County. Together, leveraging the strengths and talents of both teams, we look forward to creating a positive impact in Maricopa County while continuing to offer an unmatched banking experience in our existing markets.”

Pima is purchasing the bank for an estimated $39 million. Republic Bank currently serves 1,640 customers.

Brian Ruisinger, president/CEO of Republic Bank, said he does not anticipate that bankers will take steps to block the proposed acquisition, in part, because Arizona regulators have approved two other credit union bank buy deals and a third agreement is pending.

In 2019, Pinnacle Bank in Scottsdale was purchased by the $3.4 billion Arizona Financial Credit Union in Phoenix, and in 2022, Arizona Financial also acquired Horizon Community Bank in Havasu City.

What’s more, in November 2023, the $399 Avenir Financial Federal Credit Union in Yuma, (formerly AEA FCU) announced it planned to buy West Valley National Bank in Goodyear.

“We do not anticipate an issue,” Ruisinger said in an interview with CU Times. “We’re in very good standing with our regulator. I understand that some of my colleagues won’t be real happy with me, but for our organization, it’s a real positive thing. But I understand when you get down to the issues of expanding field of membership and the federal income tax exemption, it is quite challenging to compete from a banking perspective. And I guess now I’m in this position that if you can’t beat ‘em, join ‘em.”

Following the news of the acquisition agreement, the president/CEO of the Independent Community Bankers of America (ICBA), Rebeca Romero Rainey, issued a scathing statement calling on governmental agencies and lawmakers to put a stop to these ongoing credit union-bank acquisitions.

“With tax-exempt credit unions accounting for roughly a quarter of this year’s bank acquisitions — each of which expands the federal tax exemption for more than $2 trillion in credit union assets and displaces a trusted provider of credit in local communities — Congress must act on this dangerous trend.”

She continued, “While this harmful trend has accelerated in recent years, there are long-standing solutions. States such as Tennessee, Colorado, Minnesota, Mississippi, and Nebraska have restricted these deals, and Congress should respond in kind to this national issue. ICBA and community bankers continue calling on Congress to hold hearings, request a Government Accountability Office study on the credit union industry, and consider an ‘exit fee’ on these acquisitions to capture the value of the tax revenue lost once the acquired bank’s business activity becomes tax-exempt.

“With the nation’s community banks serving as the nation’s leading small-business and agricultural lenders, Congress should use this opportunity to investigate the nation’s outdated credit union policies and whether the government should continue subsidizing acquisitions of local, taxpaying community banks.”

Republic Bank was founded in 2007 and as of March 31, the bank had $279 million in total assets, $200 million in gross loans and $250 million in total deposits.

Pima will see its assets jump to $1.5 billion and have a total of 12 locations once the transaction is finalized.