ST. JOSEPH, Mich., and WASHINGTON (12/15/11)--The Federal Deposit Insurance Corp. (FDIC) confirmed Wednesday that it has approved the acquisition of Griffith (Ind.) Savings Bank by United FCU, based in St. Joseph, Mich. It will be the first savings bank to be acquired by a credit union.
FDIC spokesman David Barr confirmed to News Now in an e-mail that FDIC approved the measure Tuesday. He noted the FDIC does not comment on such actions.
"The transaction was approved by the National Credit Union Administration a few weeks ago, subject to FDIC approval," Gary Easterling, CEO of the nearly $1.3 billion asset United FCU, told News Now. "We received a letter from our Region I director, and we're waiting for FDIC's letter to get to Griffith."
Easterling noted that "we've been working with the team at Griffith and communicating with its customers and we will send an official notification by mail to them."
The credit union is not taking on the bank charter, but is acquiring assets and members. Under terms of the agreement, which was announced July 27, the credit union will purchase all loans, investments, real estate, accrued interest receivables, and other banking related assets of Griffith--valued at about $81 million after a discount on the loan portfolio. Griffith will retain certain assets used to fund accrued liabilities related to its employee benefits plans. Griffith will liquidate after the closing and distribute any remaining assets to its depositors.
The acquisition will be complete by Jan. 1, with the first business day of the Griffith branch as a branch of the credit union on Jan. 3, Easterling said. Griffith has one branch. Its addition will bring the credit union's branches to about 24. Griffith's board had already voted for the acquisition.
Easterling told News Now that the process likely would be more expedited now that the credit union has undergone the process for the first time. "We took a brand new pathway, and it took a while for us to work through it. I'm thankful for the patience of the regulators and all the parties involved."
The bank had first contacted the credit union in early first quarter, and the agreement was made in April, pending regulatory approval. He noted it will be an opportunity to extend United FCU into downtown Griffith, Ind., and offer perpetual financial services in Northwest Indiana.