First Commerce Credit Union in Tallahassee, Fla., has agreed to buy First National Bank of Crestview in Florida.
If approved, the deal will mark the sixth credit union purchase of a bank in the last three years, and the first in Florida. The agreement includes the purchase of FNB's assets and assumption of its liabilities. The companies did not disclose the price. The transaction is expected to close by early 2015.
"As a multi-generational family bank, after much deliberation and with our customers in mind, our board members have decided to take a less active role in the banking industry," First National's Chairman J.D. Wingard said in a press release. "We focused on finding the right financial institution partner, and First Commerce offers many unique advantages."
"We are confident that our search led us to an established, financially secure, growing credit union in our region that shares our values and will bring expanded products and services to our loyal customers," added Dale Rice Jr., the bank's president and chief executive. Rice will remain with First Commerce as regional executive responsible for day-to-day operations in Crestview.
With three branches, First National is a private commercial bank with about 5,000 customers and $85 million in assets. The $410 million-asset First Commerce has more than 45,000 members and nine offices.
First National has faced financial difficulty, losing $457,000 in the first half of this year after losing $2.3 million in 2013.
"As a growing credit union looking for opportunities to expand our services in the Southeast, we are excited about this forward-thinking collaboration and feel it is a great fit all the way around," Cecilia Homison, First Commerce's chief executive, said. "We look forward to welcoming First National Bank team members and customers to the First Commerce family and bringing them our model of remarkable service, expanded offerings and commitment to community."
Michael Bell, a lawyer at Howard & Howard, is representing First Commerce. He said the recent sale of the $23 million-asset Flint River National Bank in Camilla, Ga., to the $260 million-asset Five Star Credit Union in Dothan, Ala., set the stage for the First Commerce agreement.
"I cannot speak about the specifics of this deal. However, in general terms, this agreement trails the recently closed Five Star Credit Union deal and there are certainly similarities," said Bell. "Flint River and FNB are both national banks. The credit union involved in both deals are state-chartered, and both come from the same NCUA region. These deals should, and will, get easier to do."
Bell, who previously stated more credit union purchases of banks were coming this year, said more deals will happen in Florida this year and the next. "This is the first of multiple deals that should happen in this state. The southeast is fertile ground for deals of this nature."
This article first appeared in the Credit Union Journal.
