Indiana’s Interra Credit Union says it has completed its purchase of The Hicksville Bank in Ohio

Interra Credit Union, a Goshen, Indiana, credit union with about $2 billion in assets, announced that it has received every regulatory approval it needed and has completed its acquisition of The Hicksville Bank in Hicksville, Ohio. CU Times reported the announcement as made on Friday, October 9; The Journal Gazette of Fort Wayne reported it as early Saturday, October 10.

The deal adds four branches: two in Ohio, in Hicksville and Edgerton, and two in Indiana, in Auburn and Grabill. CU Times reported that the bank has 39 employees and about $220 million in assets; The Journal Gazette and CU Today gave about $225 million. Interra said it will contact Hicksville Bank customers directly about credit union membership and any steps they may need to take.

CU Times reported the approvals one by one. The Indiana Department of Financial Institutions gave notice on Thursday, October 8, and the FDIC approved the transaction on September 23, though the approval was not listed publicly until this week. Interra also cited approvals from the Ohio Division of Financial Institutions and from the private insurer of its members’ savings. CU Times said Interra agreed in April to pay an estimated $31 million in cash, or $47 per share, for the bank, whose holding company’s shares trade over the counter.

CU Times described the closing as Ohio’s first whole-bank purchase by a credit union. CU Today wrote that the transaction was described at its announcement as the first credit union acquisition of an Ohio bank, and that it became a contentious test case. The Ohio Bankers League and the Community Bankers Association of Ohio urged regulators in April to deny approval, arguing that banks may merge with or sell to other banks but that credit unions are not part of that framework.

“OBL and the Ohio banking industry are disappointed that the regulators approved Interra’s acquisition of The Hicksville Bank,” league president Michael Adelman said, adding that expansion by a few credit unions “could put the entire industry’s tax and regulatory advantages under greater scrutiny.” Ohio Credit Union League president Paul Mercer said the approvals show that “the decision by banks to sell assets to credit unions is fair and legal in Ohio.” CU Times noted that the bankers league said in May it was prepared to challenge the deal in court if regulators approved it; the reports reviewed here do not say whether a challenge has been filed.

On the legal side, CU Times reported that an August 12 letter from the Ohio Division of Financial Institutions found no basis to prohibit or object to the sale, and said the bank did not need the division’s approval because the buyer is not an Ohio bank. The same letter reserved “all rights as to all other aspects of the proposed transaction,” which CU Times said were not specified. Also on August 12, former Ohio House Speaker Jason Stephens introduced House Bill 986, which would bar credit unions from acquiring Ohio-chartered banks. As introduced it had no co-sponsors and no clause that would reach acquisitions already underway, and CU Times said it had not been assigned to a committee.

Sources