Deal between a bank and a credit union in the Midwest is sixth this year | Credit Union Journal


Another credit union acquires a community bank.

CoVantage Credit Union in Antigo, Wis., announced Wednesday that it has agreed to buy LincolnWay Community Bank in New Lenox, Illinois. CoVantage, a $2.7 billion asset, said it expects to close the deal for subsidiary LWCBancorp in the fourth quarter. The price was not disclosed.

“They are extraordinarily successful commercial lenders, particularly in commercial development and commercial real estate lending,” CoVantage CEO Charlie Zanayed said in a press release, referring to LincolnWay, a $277 million asset. . “CoVantage is also a very successful commercial lender and one of the few nationwide credit unions to have served commercial members throughout our business.”

Founded in 2005, LincolnWay Community Bank has total deposits of approximately $243 million, total loans of approximately $197 million, and operates two branches, one in New Lenox and one in Mokena, Illinois.

“We chose to partner with CoVantage because their culture, leadership and commercial real estate lending all align very closely with ours,” LincolnWay Community Bank CEO Mark Stevens said in the press release. .

Including the CoVantage-LincolnWay deal, there were six deals with a credit union agreeing to buy a bank in 2022, following 13 such deals in 2021. Most recently, Arizona Federal Credit Union in Phoenix agreed to buy Horizon Community Bank in Lake Havasu City, Arizona. As credit unions continue to buy banks, regulators in half a dozen states have pushed back trying to make the practice more difficult by blocking offers or pushing to tax fund-bank merger.

“The free market continues to work,” said Mike Bell, an attorney at Honigman, who advised CoVantage on the deal. “I still expect a banner year for announced deals, and more are on the way.”

LincolnWay would be the seventh Illinois-based community bank to be sold to a credit union in the past two years, said Randy Hultgen, president and CEO of the Illinois Bankers Association. He said the trend is “troubling” for the future of community banking.

“Congress should tax large credit unions with more than $500 million in assets, and federal credit unions should comply with federal CRA requirements to demonstrate that they are not abandoning communities across the country. ‘Illinois,” he said in an email, referring to the Community Reinvestment Act.

CoVantage’s revenue grew 36% to $33.4 million in 2021, according to data from the National Credit Union Administration’s call report. LincolnWay Community would be its first bank acquisition.

CoVantage serves more than 140,000 members at 20 branches in Wisconsin and Michigan.

Mercer Capital served as financial advisor and Honigman served as legal advisor to CoVantage Credit Union. Olsen Palmer served as financial advisor and Barack Ferrazzano Kirschbaum & Nagelberg served as legal advisor to LWCBancorp.


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