The fourth-largest credit union in Iowa is planning to expand into the western Illinois market with the purchase of a bank in Savanna, Ill.
Collins Community Credit Union, with $1.2 billion in assets, said it intends to acquire the assets and liabilities of the $12.3 million First Savanna Savings Bank.
Terms of the cash transaction were not disclosed.
The boards of directors of each organization unanimously approved the proposed acquisition, which is expected to close in the first half of 2020. The deal is subject to regulatory approvals as well as other customary closing conditions.
Founded in 1886, First Savanna manages $10.4 million in deposits, $8.5 million in loans and $1.3 million in capital. The bank posted a net loss of $79,000, a return on assets of -1.30 percent and a return on equity of -11.80 percent at the end of the second quarter, according to financial reports filed with the Federal Deposit Insurance Corp.
In March, the FDIC placed First Savanna under a consent order because of unsafe and unsound banking practices and alleged violations of laws and regulations of the Bank Secrecy Act. Though the bank did not admit or deny the charges of unsafe or unsound banking practices and alleged Bank Secrecy Act violations, it consented to the order, according the FDIC document.
The 14-page order, which has not been lifted, requires the bank to develop and adopt BSA compliance and training programs, designate a qualified senior bank official to oversee the compliance program and establish account transaction monitoring.
The order also requires the bank to develop and adopt a profit plan and budget, a strategic plan and prohibits First Savanna from entering into any new lines of business to high-risk customers without conducting appropriate due diligence.
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Customers of First Savanna will become members of Collins Community Credit Union when the sale is finalized. The credit union had 85,870 members on June 30.
“We are excited about this opportunity to partner with First Savanna Savings Bank and expand our footprint into Illinois,” Stefanie Rupert, president and CEO of Collins Community Credit Union, said in a prepared statement.