Banking

Largest credit union deal for a bank delayed a third time

Once again, VyStar Credit Union in Jacksonville, Florida, has extended the timeline to close its acquisition of Heritage Southeast Bank in Jonesboro, Georgia.

The $11.7 billion-asset Vystar said after markets closed Thursday that the companies had agreed to delay to June 30 the deadline to secure regulatory approvals needed to finalize the cash deal. It marked the third time the targeted closing has been postponed.

Vystar announced its bid for the $1.7 billion-asset Heritage — the largest deal to date involving a credit union buying a bank — in March 2021, and it was initially expected to close by the end of last year. The companies valued the transaction at nearly $196 million at the time.

The companies first delayed the deal last October, extending the deadline to February of this year. In February, they pushed out the timeline to the end of March.

Neither company is disclosing the specifics of what is holding up the deal. But each has noted the added time was needed to secure approvals from the Federal Deposit Insurance Corp., the National Credit Union Administration, the Georgia Department of Banking and Finance and the Florida Office of Financial Regulation. Regulators do not comment on pending deals.

In a statement, the two companies said “there can be no assurance that the parties will receive regulatory approval during the second quarter, or at all. While the parties continue to work toward closing the proposed business combination, the parties recognize that the timing of regulatory approval and customer notifications may result in the closing of the transaction occurring after June 30.”

A spate of other large bank deals also have faced delays in recent months, slowing the overall pace of M&A early in 2022. Bankers have cited staffing shortages within the regulatory agencies as well as President Biden’s orders to federal regulators last year to ramp up scrutiny of M&A.



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