The $852 million Honor Credit Union of Berrien Springs, Mich., announced it will no longer acquire Citizens State Bank of Ontonagon, Mich. The decision to drop the deal was arrived at mutually, according to news sources.
Had the deal proceeded, Honor Credit Union would have expanded its footprint in Michigan’s Upper Peninsula, where Citizens operates three branch locations with com
bined assets of $53 million. Honor CU also has three offices in the U.P., located in Marquette, Negaunee and Gwinn, which it acquired through a 2014 merger with SIR Federal Credit Union.
The Honor-Citizens deal was originally announced in May 2017.
Honor completed two mergers with other credit unions in 2017. In April, it acquired Battle Creek Area Community Federal Credit Union, and in October it acquired Post Community Credit Union, both in Battle Creek, Mich. With those deals, Honor has 24 locations, primarily in the southwest portion of Michigan.
Since 2011, there have been 16 credit union-bank acquisitions, according to Jim Sheriff, senior partner at Reinhart Boerner Van Deuren in Milwaukee. Michael Bell of Howard & Howard PLLC, the attorney representing Honor for this deal, said these types of deals are becoming more common, according a news source. Sheriff points to credit unions’ tax exempt status as allowing them to pay more when a bank is opened for bidding. Bell hinted that small banks in remote areas sometimes have limited options when wanting to sell. Ontonagon is a village of 1,500 people located on the south shore of Lake Superior.
“Citizens State Bank of Ontonagon and Honor Credit Union have mutually decided to continue serving their respective customers and members independently versus moving forward with their previously announced partnership,” according to a prepared statement released by both institutions.