Minnesota credit union buying a Wisconsin community bank

Wings Financial Credit Union in Apple Valley, Minnesota, has agreed to buy Settlers Bank in DeForest, Wisconsin.

The $8 billion-asset Wings did not disclose the price it will pay for the $390 million-asset subsidiary of SB Bancorp. The transaction is expected to close by the middle of 2023.

When the purchase is complete, Settlers Bank locations will be rebranded as Settlers Best Credit Union, a division of Wings Financial Credit Union, Wings said.

"Settlers bank was started 15 years ago to be accessible and to build relationships through collaboration. Wings shares these values and our partnership will allow us to build on our already strong market momentum," Tom Spitz, Settlers Bank's founder and CEO, said in a press release Wednesday.

The deal is the third bank acquisition deal announced by Wings Financial, the largest credit union in Minnesota. But its deal for the $224 million-asset Neighborhood National Bank in Mora, Minnesota, announced in 2020, was terminated. 

In January 2021, Wings Financial announced it would buy Brainerd Savings & Loan in Minnesota. The deal closed in June that year.

There have now been 11 announcements this year of a credit union buying a bank.

Most recently, Harvesters Credit Union in Cantonment, Florida, agreed to acquire First National Bank Northwest Florida in Panama City in August. 

Last year, 13 banks agreed to be sold to credit unions, approaching 2019's record of 16 such sales.

Wings has 28 branches throughout Minnesota, plus branches in Atlanta, Detroit, Orlando and Seattle. With the Settlers Bank acquisition, it will also have three locations in Wisconsin.

"We're excited about the opportunity to introduce our services to the Wisconsin market," Frank Weidner, Wings Financial Credit Union's president and CEO, said in the press release. "We've been exploring opportunities to expand into Wisconsin, and this transaction was a great fit for both Settlers Bank and Wings. This opportunity will jumpstart our market presence in Wisconsin."

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Attorney Michael Bell of the law firm Honigman in Detroit advised Wings Financial on the Settlers Bank deal. Bell, who predicted in January that there would be a record 25 announcements of credit unions buying banks this year, said that number fell because many potential sellers are in a holding pattern. 

"There are no regulatory issues," Bell said. "There are a few more that should announce prior to year's end. The sellers will sell, but the question becomes when, and it looks like many are pausing until 2023."

Most credit unions looking to acquire banks today do so for the geographic expansion those deals provide — like the Wisconsin branches Wings Financial will gain from buying Settlers Bank — and also the talent they obtain, Bell said. 

Founded in 2007, Settlers Bank is a privately owned provider of commercial, treasury, mortgage and private banking services.

Raymond James & Associates served as financial advisor and Honigman served as legal advisor to Wings Financial Credit Union. Oak Ridge Financial served as financial advisor and Boardman & Clark served as legal counsel to SB Bancorp Inc.

Wings Financial earned $59 million in the first nine months of 2022, a 3% decrease compared with the first three quarters of 2021, according to call report data from the National Credit Union Administration.