East Lansing, Mich.-based Michigan State University FCU has agreed to acquire Algonquin, Ill.-based Algonquin State Bank in its second bank buy this week.
The financial terms of the transaction, expected to close late in the first quarter of 2024, were not disclosed. The announcement came just days after the credit union struck a deal to acquire McHenry, Ill.-based McHenry Savings Bank.
With the addition of Algonquin State Bank's $144.6 million in assets and McHenry Savings Bank's $322.4 million in assets, Michigan State University FCU will creep closer to the critical $10 billion asset threshold. The credit union, which had $7.71 billion in assets at June 30, expects to have about $9 billion in assets by the end of 2024, according to the press release.
The acquisitions of the two Illinois-based banks will expand the credit union's footprint into the Prairie State. The deals will specifically expand its presence into the Chicago MSA, an area the credit union has been working to move into and recently announced plans to open five branches.
With the Algonquin State Bank deal, Michigan State University FCU will enter McHenry County, Ill., with three branches to be ranked No. 17 with a 1.49% share of about $9.6 billion in total market deposits, according to S&P Global Market Intelligence data.
Market Intelligence valuations for bank and thrift targets in the Midwest region between Aug. 31, 2022, and Aug. 31, 2023, averaged 146.27% of book and 153.32% of tangible book and had a median of 13.90x last-12-months earnings, on an aggregate basis.
Michigan State University FCU is the second credit union to strike two bank deals this week after Five Star CU announced its intentions to acquire OneSouth Bank and Wilcox County State Bank on Aug. 28 and Aug. 31, respectively.
Now, 10 credit union-bank deals have been announced in 2023, with half of those announcements coming just this week.
The boards of both institutions unanimously approved the deal, but it remains subject to approval from First Algonquin Co. shareholders and regulators.
Piper Sandler & Co. financially advised Michigan State University FCU, while Luse Gorman PC was legal counsel. First Algonquin Co. and Algonquin State Bank were financially advised by Olsen Palmer LLC, with Vedder Price PC as legal counsel.
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