GARDNER, Mass.-GFA FCU is still awaiting the final go-ahead to complete the purchase of Monadnock Community Bank.
Announced early this year, it is the first time a stock institution was purchased by a credit union (CU Journal, March 2). The purchase of Indiana's Griffith Savings Bank by United Credit Union, St. Joseph, Mich., which preceded the GFA deal, is the first-ever credit union acquisition of a bank.
GFA CEO Tina Sbrega told Credit Union Journal that GFA FCU still does not have all its final approvals yet, but declined to identify which approvals remain outstanding. "We still maintain a goal to execute the transaction before year-end or early January," she said.
The deal has to be approved by the NCUA, FDIC, the OCC and state regulators.
Monadnock CEO William Pierce said the recession exacerbated growth problems his Peterborough, N.H., bank was experiencing and uneasiness about falling under a new regulator, the OCC, led to the final decision to sell to GFA.
Both credit unions deals for banks have established a precedent that others may well follow, a number of sources have indicated (Credit Union Journal, March 19). But Paul Aguggia, an attorney with Atlanta-based Kilpatrick Townsend & Stockton LLP, who has advised mutual banks and credit unions on mergers and other corporate matters, cautioned CUs about expanding their acquisition strategies.
"This reopens the taxation debate," observed Aguggia. "Some bankers are saying, 'Wait, if you're going to play in the same sandbox as banks, why do you still have the exemption from taxation?'"