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Stymied in Iowa, GreenState Credit Union Crosses B

Archived Industry News:Stymied in Iowa, GreenState Credit Union Crosses Border to Buy Banks

Last Updated: 5/28/2021 3:33 PM

Stymied in Iowa, GreenState Credit Union Crosses Border to Buy Banks

GreenState Credit Union announced this week plans to buy two banks with combined assets of $1.1 billion. The deals are the third and fourth bank acquisitions by credit unions this year.

The pending acquisitions include Oak Brook, Illinois-based Oxford Bank & Trust and Omaha-based Premier Bank. GreenState will purchase substantially all of Oxford’s assets and liabilities, including all six branches in Addison, Naperville, Plainfield and Westmont, Illinois, as well as its headquarters in Oak Brook. It is the second largest bank acquisition by a credit union this year. The credit union’s acquisition of Premier Bank includes its $345 million in assets and four branches in Omaha and Nebraska City. The transactions are expected to be completed later this year, pending regulatory approval.

As reported in S&P Global, the credit union had to look out of state for bank acquisitions following its battle with the Iowa Division of Banking in March 2020. After GreenState closed the First American purchase in February 2020, the IDOB opposed the deal by denying the bank’s application to cease operations. Eventually, the parties settled and the IDOB approved the application, but the regulator declared that it will “quickly deny” any such deals in the state in the future.

The deal will result in GreenState exceeding $8.5 billion in total assets. The credit union recorded net earnings of $115 million in 2020. Nearly a quarter of its loans are now devoted to commercial activities. The new branches they’re acquiring are in wealthier neighborhoods or suburbs in Omaha and Chicago. These deals ultimately reduce the tax base that supports local communities, while removing any accountability for addressing the needs of low- and moderate-income neighborhoods.

“When a credit union can justify their offer price by projecting tax-free future earnings, you have a distinct advantage over others in the marketplace,” said IBA President and CEO John Sorensen. "The future viability of many community banks, especially our locally owned banks in rural communities, is tied to diversification that comes from expansion to neighboring communities. Learn more. 

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