Banking & Finance, Real Estate, and Retail

Credit union acquiring $119M bank

April 30, 2019
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Teachers Credit Union branch
A Teachers Credit Union branch. Photo via fb.com

An out-of-state credit union is acquiring a bank based in the region.

South Bend, Indiana-based Teachers Credit Union, or TCU, and New Buffalo-based New Bancorp, the holding company for New Buffalo Savings Bank, signed a definitive agreement in which TCU will acquire the assets and assume the liabilities of New Bancorp and New Buffalo in an all-cash transaction, according to the organizations this week.

The transaction is valued at $21.3 million — or $23.4 million “if the (New Buffalo) liquidation account is not required to be distributed to depositors” — or approximately 128.5% of New Bancorp’s tangible book value as of Dec. 31, 2018 or 141.2% "if the (New Buffalo) liquidation account is not required to be distributed to depositors."

The transaction was unanimously approved by the boards of both institutions and is expected to close in the second half of this year, subject to customary closing conditions and shareholder and regulatory approvals.

Following the close, New Bancorp will settle its remaining obligations and distribute the remaining transaction proceeds to its shareholders.

After the sale, New Buffalo's corporate existence is expected to be terminated, and New Bancorp will be dissolved. This process may take up to 45 days.

All three of New Buffalo Savings’ banking locations will continue to operate as branches of TCU.

New Buffalo Savings Bank’s customers will become members of TCU.

The acquisition will increase TCU’s total number of branches to 57 and total assets to about $3.2 billion.

Paul Marsh, president and CEO of TCU, said his team is excited about “welcoming customers and employees into the TCU family.”

“This acquisition will allow us to expand our footprint and better serve our members in southwestern Michigan, and it will result in better banking access for New Buffalo Savings Bank’s customers as well,” Marsh said.

Richard Sauerman, president and CEO of New Bancorp and New Buffalo Savings Bank, said the acquisition brings new opportunities for New Buffalo Savings Bank’s customers, employees and community.

“TCU is a solid homegrown financial institution, and this deal ensures that local banking will remain in our community,” Sauerman said. “We are also appreciative of the support from our shareholders, and we believe that this transaction will be beneficial for them.”

In addition to growing TCU’s footprint in southwest Michigan, the acquisition is expected to enhance the credit union’s business lending efforts by adding New Buffalo’s Small Business Administration lending capabilities.

M&A advisors

New Bancorp is being represented in the transaction by New York-based Keefe, Bruyette, & Woods and Washington, D.C.-based Luse Gorman.

TCU is being represented by West Conshohocken, Pennsylvania-based Boenning & Scattergood and Chicago-based Krieg DeVault.

New Bancorp

New Bancorp (OTC: NWBB) became the stock holding company of New Buffalo in connection with New Buffalo’s mutual-to-stock conversion in 2015.

New Buffalo, founded in 1921, operates three bank branches in New Buffalo, Sawyer and Three Oaks.

The bank had $119.5 million in assets as of Dec. 31, 2018.

TCU

Founded in 1931, Teachers Credit Union is Indiana’s largest credit union, with more than $3 billion in assets, 54 branches throughout the state of Indiana and southwest Michigan and more than 300,000 members.

It is a financial cooperative owned by its members and offers traditional financial services, including checking, savings, mortgages and credit cards, as well as investment and insurance services.

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