Lakeland, Fla.-based MIDFLORIDA CU is expanding its footprint with the purchases of a Florida-based community bank and the Florida banking operations of an Iowa-based bank. The pair of deals will push the credit union over $4 billion in assets, and it is on the prowl for more acquisitions.
The deals represent a growing trend of credit unions buying banks and thrifts. MIDFLORIDA is the fifth Florida-based credit union to buy a community bank or thrift just this year, and the sixth in the U.S. In 2018, there were nine deals in which credit unions purchased banks.
MIDFLORIDA, which reported $3.49 billion of assets at March 31, will purchase Ocala, Fla.-based Community Bank and Trust of Florida, which reported $733.3 million of assets. There is no branch overlap in the all-cash deal, so it will expand MIDFLORIDA's operations northward. The majority of Community Bank and Trust of Florida's operations are in Ocala, where the bank has seven branches and is the No. 6 bank by deposit market share with $475 million of deposits. The bank also has branches in The Villages and Gainesville. MIDFLORIDA had no branches in the three metros, with most of its locations in the Lakeland, Orlando and Tampa metros.
MIDFLORIDA simultaneously announced the acquisition of the Florida assets of Fort Dodge, Iowa-based First American Bank. That deal expands MIDFLORIDA's footprint southward with two branches in Naples and one branch in the Cape Coral market, as well as a loan production office in Boca Raton.
Financial terms of the deals were not disclosed.
S&P Global Market Intelligence valuations for bank and thrift targets in the Southeast region between May 3, 2018 and May 3, 2019 averaged 164.08% of book and 178.21% of tangible book and had a median of 22.22x last-12-months earnings on an aggregate basis.
MIDFLORIDA CEO Kevin Jones said in a press release that the credit union's buying spree is not over.
"We hope to strategically acquire additional financial institutions in Florida to expand our affordable consumer and business services," he said.
Thomas Rudkin, a principal for DD&F Consulting Group, which advised MIDFLORIDA on the deals, said the credit union will consider both in-market deals and ones that further expand its geographic footprint.
"It's also very important to them to find depositors or members who have a strong relationship on the lending side of the bank, so it's not just deposits or just loans," he said in an interview.
The credit union plans to retain all of the branches, including all branch staff, in both transactions. The credit union will also establish a trust company in the wake of the deal to continue managing the approximately $300 million of trust assets acquired from Community Bank and Trust.
The credit union expects to close the First American Bank branch acquisitions by November and the Community Bank and Trust acquisition at year-end, subject to regulatory approvals.
DD&F Consulting Group served as financial adviser for the credit union on both deals. Its legal counsel was Howard & Howard for the Community Bank and Trust acquisition and Smith Mackinnon for the branch deal. Hovde Group LLC was the financial adviser for both Community Bank and Trust and First American Bank. Smith Mackinnon was Community Bank and Trust's legal counsel, and Barack Ferrazzano Kirschbaum & Nagelberg advised First American Bank.