The $716 million Self-Help Federal Credit Union in Durham, N.C. said Monday it agreed to buy nine branches and $240 million in deposits previously owned by the largest African-American bank in the Midwest.
The branches were operated by Seaway Bank in Chicago, which the State Bank of Texas acquired in January.
The Dallas-based bank will continue to operate the former Seaway branch at O’Hare International Airport and Seaway’s $200 million loan portfolio, according to the Chicago Tribune.
The deal is subject to regulatory approvals and certain closing conditions.
Seaway was the largest African-American owned bank in the Midwest that served communities in west and south of Chicago as well as Milwaukee for many years.
Financial losses caused by the foreclosure crisis and the subsequent Great Recession led the FDIC to take control of the bank in late January and sell its assets and operations to the State Bank of Texas. From 2006 to 2012, home prices in Chicago plunged by 39% and have only recovered about half of their value since then.
At the time it was sold, Seaway managed $361 million in total assets and $307 million in total deposits.
Self-Help FCU said it expects to assume management of the Seaway branches and deposits on May 1.
Seaway will operate as a division of Self-Help FCU. The division will be led initially by Al Bass, a Self-Help executive vice president and a former senior executive of two African-American banks in North Carolina.
While plans for the organization are still under development, Self-Help FCU said it is committed to preserving Seaway’s legacy and continuing its mission.
“Seaway built a long history of financial service to families and businesses of modest means,” Self-Help FCU President/CEO Martin Eakes, said in a prepared statement. “We seek to carry Seaway’s torch forward.”
Self-Help’s Second Federal division serves more than 12,000 members in the Little Village, Archer Heights, and Cicero communities in Chicago. After the Second Federal Savings and Loan failed in 2012 Self-Help FCU purchased $141 million of the institution’s mortgage loans in association with The Resurrection Project, a local community development organization, and Wintrust Financial Corp.
