Tennessee Credit Union Makes First Proposed Acquisition of Kentucky Bank
Y-12 Federal Credit Union is expected to close the planned purchase of First State Bank of the Southeast by Q2 of 2025.
The $2.2 billion Y-12 Federal Credit Union in Oak Ridge, Tenn., said Wednesday it expects to complete its proposed acquisition of the $415 million First State Bank of the Southeast (FSB) in Middlesboro, Ky., by the second quarter of next year, pending regulatory and shareholders approvals.
Financial terms of the definitive agreement were not disclosed.
Its first bank acquisition marks a significant milestone for Y-12 FCU as it expands the 74-year-old community-focused brand beyond the borders of Tennessee, which is listed as the state’s sixth largest financial cooperative, according to Deposits.com.
FSB, founded in 1899, managed $349 million in net loans, $359 in deposits and $31.2 million in capital, and posted net income of $1.8 million, according to the bank’s second quarter financial filings.
“The addition of FSB allows us to expand our footprint and bring the benefits of credit union membership to Southeast Kentucky. We’re excited to welcome FSB customers and employees into the credit union philosophy of ‘people helping people,’” Y-12 FCU President/CEO Mark Ziegler said in a prepared statement. “By combining our strengths, we can offer even more personalized service and financial opportunities, while continuing to invest in community initiatives that positively impact East Tennessee and Southeast Kentucky.”
FSB’s 80 employees run eight branches in Pineville, Middlesboro, London, Williamsburg, Lexington and New Tazewell, and serve approximately 20,000 customers.
Y-12’s 357 employees operate 16 branches across eastern Tennessee in Anderson, Blount, Campbell, Knox, Loudon, Roane and Sevier counties, and serve more than 115,000 members.
“FSB is my family’s legacy, and I am enthusiastic about partnering with a strong financial institution like Y-12 Credit Union. By combining the strengths of both organizations, we will bring expanded opportunities to our customers, employees and communities, backed by greater financial resources and advanced technology,” FSB Chair/CEO Katherine Reese said in a prepared statement.
The bank was founded by George H. Reese 125 years ago in Pineville, Ky., and was known early on as “Mr. Reese’s Bank,” who built a stellar reputation for delivering dependable banking services for the community.
“Together, we’re delivering the best of both institutions while maintaining the family-oriented culture we’ve built,” she said. “Y-12 Credit Union’s dedication to its employees, demonstrated by multiple Top Workplaces Culture Excellence Awards, aligns perfectly with our mission and core values.”
This is the 19th credit union-bank acquisition agreement that has been announced this year. In addition, there is one proposed merger of the $147 million Arrha Credit Union in Springfield, Mass., into the $404 million Pittsfield Co-operative Bank in Pittsfield, Mass.
In 2023, there were 11 credit union-bank buy deals announced, but one agreement has not been finalized. In 2022, there were 16 credit union-bank agreements, but two deals were not finalized.