Atlanta Postal Credit Union and Affinity Bancshares have terminated an agreement in which Atlanta Postal had planned to acquire the Covington, Georgia-based bank.
News of the mutual termination came the same day a suburban Detroit credit union announced plans to purchase a community bank in Michigan's Upper Peninsula. The $839 million-asset Zeal Credit Union in Livonia said Monday it would acquire Gogebic Range Bank in Ironwood for an undisclosed sum.
That deal is the record 22nd this year involving a credit union buying a bank as credit unions seek to diversify into business lending and expand their footprints. Critics say credit unions have an unfair advantage in the M&A market due to their tax-exempt status.
The Atlanta Postal-Affinity deal fell through after discussions between the credit union and regulatory agencies, the institutions stated late Monday in a press release. Following those conversations, the $2.4 billion-asset Atlanta Postal informed Affinity it would withdraw its purchase application with the Georgia Department of Banking and Finance.
Neither Atlanta Postal nor Affinity provided details about the conversations. A spokesperson for Atlanta Postal CEO Blake Graham declined to comment Tuesday. Affinity CEO Edward Cooney had not responded to a request for comment at deadline.
The National Credit Union Administration referred inquiries about the termination to the Georgia Department of Banking and Finance. The department's commissioner, Kevin Hagler did not respond to a request for comment Tuesday, the day before the New Year's holiday.
News of the termination sent Affinity's stock price plunging Tuesday. Shares were trading down 20% at $17.45 Tuesday afternoon.
Affinity shareholders had overwhelmingly approved the purchase by Atlanta Postal at a Nov. 4 special meeting. The purchase agreement, made public on May 30, called for Atlanta Postal to pay $22.50 per share — about $144.4 million based on Affinity's shares outstanding on May 7 — for the $879 million-asset Affinity.
Graham said in a press release at the time that purchasing Affinity would expand his credit union's presence in Atlanta and its surrounding communities. Affinity maintains two branches in Newton County, where it has the largest market share in deposits, along with a branch in Atlanta.
Affinity reported net income totaling $1.73 million for the quarter ended Sept. 30. Affinity's third-quarter profit was up 6% over the same period in 2023 despite a $298,000 increase in noninterest expenses connected with the Atlanta Postal acquisition.
Affinity's purchase agreement with Atlanta Postal when it was announced was the 11th transaction involving a credit union acquiring a bank in 2024.
Prior to Monday, the
Zeal's plan to buy Gogebic Range is the 22nd credit union-bank merger announcement this year.
Zeal has a significant footprint in the Upper Peninsula and acquiring the $147 million-asset Gogebic Range will expand it, CEO Julie Kreinbring said Monday in a press release. "Gogebic is a well-managed bank, and we look forward to welcoming their customers and employees into our family," Kreinbring said.
Gogebic Range reported net income totaling $667,000 for the first nine months of 2024, according to the Federal Deposit Insurance Corp. Growing loans has proved challenging, however. While assets have expanded 18% since 2019, most of the growth has been concentrated in the securities portfolio. Loans actually declined, from $76.4 million on Sept. 30, 2019, to $56.9 million five years later.
Gogebic Range President and CEO Neil Beckman called combining with Zeal "the best path forward for our organization" in the press release.
Beckman did not immediately respond to a request for comment.
