Page 20 - Michigan Credit Union League: 2017 Contact Q4
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ACQUIRING BANK ASSETS:
A NEW OPPORTUNITY FOR CREDIT
UNION GROWTH
Currently, two Michigan credit unions are acquiring The motivation for a credit union acquisition of
the assets of two community banks. Advia bank assets is straightforward. Advia’s inten-
Credit Union in Parchment acquired the assets tions are “to gain market share and presence,
of Peoples Bank in Elkhorn, Wisconsin, on expand membership, fill in gaps in the branch
September 1, while Honor Credit Union in Berrien footprint, diversify lending and markets, and add
Springs has sought to purchase the assets of expertise,†Advia CEO Cheryl DeBoer told MiBiz.
Citizens State Bank of Ontonagon in the Upper On a larger scale, she said these tangible addi-
Peninsula. This looks to be a new trend for credit tions to the credit union work to “provide better
unions seeking to widen their footprint. overall member experiences and strengthen
the credit union through economies of scale,
Michigan news publication MiBiz recently spoke diversification and increased talent acquisition.â€
with Mike Bell, a partner at Howard & Howard
Attorneys PLLC in Royal Oak, who specializes The Michigan Credit Union League spoke with
in transactions where credit unions purchase DeBoer to get additional insight into Advia’s expe-
bank assets. He is working on 14 such potential rience regarding its transaction and what other
acquisitions, and told MiBiz that this type of credit unions should consider when approaching
transaction is expected to swell in 2018. similar types of acquisitions.
According to MiBiz Senior Writer Mark Sanchez, Specifically, how did this deal come about?
this upward trend is driven by small banks being What did you do to make Advia’s position known
pressured by escalating regulatory costs and as a willing partner?
limited growth potential concurring with credit
unions’ desire to expand. This deal, and most like it, is really the result
of the leadership of both financial institutions
“Down at this smaller area, there’s nobody wanting the very best return and long-term
(among banks) there,†Bell told MiBiz. “This growth opportunity for its customer (or mem-
strategy presents a new option for credit ber) base. We are not an aggressive seeker
unions to grow in their geography, their loans, of mergers and acquisitions, but are definitely
their members, deposits and perhaps prod- open to partnerships that provide additional
ucts and skill sets. This is a tool to do that benefits for our members. There are numer-
and it’s quite effective.†ous attorneys and investment bankers that
bring these types of opportunities to us. With a
“For any bank or credit union that wants to buy, growing number of financial institutions under-
there remains plenty of opportunity,†Sanchez going the financial and operational strains of
said. “One-quarter of the bank executives sur- regulatory-related issues, economic pressures,
veyed in 2016 by Bank Director Magazine said operational expenses and technology needs,
they were open to selling, considering a sale this opportunity presents itself with both credit
or actively seeking an acquirer.†In other words, unions and community banks. We work to be a
growing credit unions looking to take advantage good resource for other financial institutions and
of this new opportunity will be smart to voice industry partners by developing relationships for
their position loudly, making it known to current a multitude of reasons.
and future sellers.
20 FOURTH QUARTER 2017  I  CONTACT
