Madison, Wis.-based Summit Credit Union is buying the $837 million, West Bend, Ill.-based Commerce State Bank.
The transaction, expected to close in the third quarter of this year, will result in a combined organization with nearly $6 billion in assets and 54 locations.
This is the first bank acquisition for the $4.8 billion Summit, the second-largest credit union in Wisconsin. Summit Credit Union CEO and President Kim Sponem will remain the CEO of the combined organization. Summit has more than 225,000 members and 754 employees across 50 locations in south-central and southeastern Wisconsin.
“Commerce State Bank is an exceptionally well-run institution and has experienced tremendous success,” Sponem said. “We have similar values, cultures, and dedication to the highest levels of member and community service. This is a terrific strategic fit. Commerce State Bank’s stellar commercial lending portfolio adds to our strengths in mortgage and small business lending, as well as helping people with their everyday financial needs.”
Commerce State Bank CEO Joe Fazio said the acquisition “is about growing to serve current clients, expanding to new communities, rewarding our shareholders, and providing career opportunities for employees of the combined company.”
Summit Credit Union was advised on the transaction by Dan Martin of McQueen Financial Advisors and Mike Bell of Honigman, LLP. Commerce State Bank was advised on the transaction by Hillworth, LLC and Reinhart Boerner Van Deuren, s.c.
The agreement is drawing pushback from the Wisconsin Bankers Association. Tension between the association and credit unions had already been brewing after a state bill was introduced last year that would enable state-chartered credit unions to issue subordinated debt; allow non-members to be a party to a credit transaction; and give credit unions the chance to transfer and lease property, subject to guidance by Wisconsin’s Office of Credit Unions.
The WBA noted that the latest acquisition is the sixth purchase of a Wisconsin bank by a credit union over the last decade. “Wisconsin taxpayers should be very concerned about this transaction as the state alone will lose over $1 million annually in future tax revenues with this sale because credit unions do not pay any state or federal income tax,” the WBA stated. “With large credit unions becoming indistinguishable from tax-paying banks, it is time for the public and elected officials to question the public policy rationale for this significant tax benefit.”