Surge of credit unions buying banks continues with deal in Illinois

The recent surge of deals involving credit unions buying community banks continues.

The $1.5 billion-asset Scott Credit Union in Edwardsville, Illinois, plans to buy the $92.9 million-asset Tempo Bank in Trenton, Illinois, for $14.25 million, the credit union announced Friday.

The deal is the fifth announced since Aug. 5 in which a credit union is buying a bank.

Shareholders of Sugar Creek Financial Corp., the holding company for Tempo Bank, are estimated to receive between $14.50 and $16.50 per share.

Sugar Creek has 790,701 shares of common stock outstanding.

“Tempo Bank is proud of our long history of being locally owned and operated, and we’re excited to be joining another local financial institution that shares the same sense of pride in the Metro East,” said Robert Stroh Jr., chairman, CEO and chief financial officer of Sugar Creek Financial Corp. and Tempo Bank in the press release. “We know our customers will benefit from all the additional resources that Scott Credit Union has to offer while knowing that their money is staying right here in the community.”

Stroh plans to retire after the deal closes, although he will serve as a consultant to Scott Credit Union for a period of time following the consolidation.

He has served the bank, which was founded in 1889, for more than 45 years.

“Tempo Bank is a well-managed bank, and we believe its robust mortgage lending portfolio will be beneficial to the credit union as we continue making strides for our goal of long-term growth,” Frank Padak, president and CEO of Scott Credit Union, said in the press release.

Padak said the acquisition will increase Scott Credit Union’s footprint to 22 branches across the Metro East and St. Louis area. The acquisition is part of Scott Credit Union’s strategic growth plan, which includes adding branches to better assist its members in Illinois.

The deal is expected to close in the second quarter of 2022. It is the 10th transaction announced this year in which a credit union is buying a bank.

Most recently, Fairwinds Credit Union in Orlando on Thursday announced it was buying $489 million-asset Citizens Bank of Florida.

There were seven such deals last year. The most ever announced in one year was 16 in 2019.

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