The $5.1 billion Lake Michigan Credit Union in Grand Rapids said Monday it will buy the $418 million Encore Bank, which makes the definitive agreement the largest bank acquisition by a credit union to date.
The Naples-Fla.-based bank, which serves about 20,000 customers, manages $279 million in real estate loans, $10 million in commercial loans and $5.5 million in individual loans, according to Encore’s June 30 balance sheet filed with the FDIC.
At the end of the second quarter, Encore Bank posted net income of $1.1 million, according to its income statement. The bank posted a net income of $522,000 and an ROA of 0.52% at the end of the first quarter, according to the FDIC.
Encore Bank also operates six branches, which will increase Lake Michigan’s branch network to 10 and expand the credit union’s presence in the “growing Southwest Florida region,” said Sandy Jelinski, president/CEO of LMCU. She also said in a prepared statement that there is no overlap among the bank’s six branches and credit union’s four branches in the Sunshine State.
LMCU did not disclose financial terms of the bank acquisition.
The acquisition also has the potential to increase the credit union’s membership from 306,218 to 326,218.
Tom Ray, CEO of Encore Bank, will serve as regional president of LMCU in Florida.
Pending all regulatory approvals, the acquisition may be finalized during the first quarter of 2018. The bank purchase will increase Lake Michigan’s assets to $5.6 billion and it will manage more than $9 billion in serviced mortgages.
This agreement represents the third bank acquisition deal announced by credit unions in 2017.
In May, the $189 million Trona Valley Community Federal Credit Union in Green River, Wyo., inked an asset purchase and liability assumption agreement to buy the $36 million State Bank also based in Green River, and the $52 million Citizens State Bank of Ontonagon, Mich. plans to sell its assets and liabilities to the $761 million Honor Credit Union of Berrien Springs, Mich.
From January 2012 to May 2017, there have been 13 completed acquisitions of banks by credit unions.
