Arizona FCU expects to complete proposed acquisition of Bank by year end
Arizona’s third-largest credit union said Thursday it plans to buy the state’s second-largest community bank.
By the end of this year, the $2.7 billion Arizona Federal Credit Union in Phoenix said it plans to complete the $539 million acquisition of Horizon Community Bank. dollars in Lake Havasu City.
Financial terms of the deal were not disclosed. It was the fifth proposed purchase between a credit union and a bank in two weeks.
In a letter to members, AFCU President and CEO Ronald L. Westad said buying the bank should bring three benefits: expansion into new markets, some of which have limited banking options to serve and increase membership; diversification of the credit union’s assets which will enhance its financial strength; and generating new revenue that will fund additional services and locations.
HCB ended last year with net income of $5.9 million, nearly double its net income of $3.9 million in December 2020, according to FDIC financial performance reports.
The bank, which specializes in commercial loans, posted an ROA of 1.12% in 2021, compared to 0.94% in 2020. HCB manages $470 million in deposits and more than $43 million in capital.
Founded in 2002, HCB’s 88 employees operate seven offices serving approximately 12,000 clients. Two of the bank’s branches are in Lake Havasu City and one in Fort Mohave, Kingman, Parker, Quartzsite, and Mesa.
“We believe that growing membership and assets is critical to long-term success in the financial services industry. With greater scale, we can continue to provide both the high-tech and touch-enabled services you’ve come to expect,” Westad wrote in his letter to members. “Having acquired and successfully integrated Pinnacle Bank in 2019, we have seen the benefits of the acquisition as a strategy to complement organic membership growth.”
He also noted that due to the purchase of Pinnacle Bank, AFCU now offers a full suite of mortgage services for small business and residential loans and has been designated as the SBA’s preferred lender.
“At the height of the pandemic, we were able to provide our members with over $60 million in repayable loans under the Paycheck Protection Program, enabling thousands of people to remain employed across the Valley” , he wrote.
If the AFCU-HCB deal is approved by shareholders and regulators, the combined organization will manage more than $3.3 billion in assets and 21 branches that will serve more than 155,000 members, making it the second-largest Arizona’s largest credit union behind the $8.2 billion desert. Financial Credit Union in Phoenix.