Two major financial institutions from St. Joseph, dynamic in their own right, are joining forces early next year to form a powerhouse team laser focused on local service and advancing technologies.
In a deal that has been quietly discussed off and on by the two top players involved for the better part of a year, the spring of 2021 is poised to see two become one “Real United” entity in Michigan’s Great Southwest going forward in a transaction that one party says will make “one-plus-one equal three.”
United Federal Credit Union and Edgewater Bank, both headquartered in St. Joseph, have announced plans this morning to strategically unite into the area’s foremost local financial institution, according to United President and CEO Terry O’Rourke.
O’Rourke, who expects United’s acquisition of Edgewater to be finalized in the spring of 2021, says, “This collaboration is all about the community,” and adds, “Our two organizations are one hundred percent committed to local decision making, local investment and local involvement and we both want to fortify that real local focus. Together, we can do more for the financial well-being of everyone that calls Southwest Michigan home.”
Edgewater’s President and CEO Rick Dyer echoes O’Rourke’s emphasis on making sure Southwest Michigan has the strongest and broadest financial opportunities, saying, “Our two organizations share the same core values and have similar cultures. That’s why we are calling this partnership the ‘Real United’ campaign. Our teams understand what it means to take care of our customers and members and how to exceed their expectations for service. Rather than continue competing for local business, employees and resources, it makes the most sense to combine our expertise to truly be the most dynamic, financial force in our local communities. This is real local progress.”
Dyer says, “Terry and I started talking about the ‘what if’ a while back, and the more we talked, the more we realized that our two organizations complimented each other very well.” He adds, frankly, “We’re a proud bunch at Edgewater. We’ve come a long ways and built a solid franchise, and felt that if we were ever to consider an affiliation, it would have to be with another organization that believed in our communities, that understood local, and had the same passion for helping people as we did. The only organization that fit that bill was United Federal Credit Union.”
O’Rourke responds, by saying, “I’m appreciative of the opportunity to collaborate with Rick Dyer and his extremely dedicated team. Rick and I share a commitment to serving the community and this partnership enables us to better leverage our organizations strengths and resources to do more for Southwest Michigan.”
O’Rourke explains that once the shareholder and regulatory approvals are finalized, Edgewater customers will be eligible to become members of United. They will have access to more technology, knowledge, products and services as well as other United membership perks. However, many things in the local financial landscape will stay the same. Pending shareholder and regulatory approval, all of Edgewater’s branches will remain open, except for one. Due to its proximity to United’s Buchanan branch, Edgewater’s Buchanan branch and its employees will be consolidated into the United branch.
O’Rourke emphasizes, “We want Edgewater customers to know that they can expect to maintain the same local relationships they have with the commercial lending officers and employees they have come to value and trust.” That includes Rick Dyer, who will have a leadership and decision-making role as Community President within United once the transaction is complete.
Dyer says, “I will remain actively involved in local decision making,” and, says, in fact, “You will continue to see me and other Edgewater team members advocating for and working in the best interests of everyone in our area.”
O’Rourke and Dyer say that until approvals are complete, it will be business as usual for both organizations. Edgewater customers will continue to access their branches, accounts and services as they do now. Both CEOs assure that their customers, members and employees will get updates throughout the approval and regulatory processes. Once the transaction is complete, the transition from Edgewater to United will be as smooth as possible for customers and employees.
O’Rourke points out, “This is a partnership of minds and ideas, of ideals and values, of resources, talent and community spirit,” adding, “Unifying the 110-year-old ‘Real Local Bank’ with United, a credit union with over 70 years of local community service, will give our customers, members and communities more.”
Dyer concurs, noting, “The two organizations with long track records of serving southwest Michigan, joining forces, becomes an even stronger financial powerhouse.” He also makes the point that, “Local decision making is extremely important to Edgewater. This affiliation allows us to continue to make decisions close to the customer, by people who understand the market. Meanwhile, technology is critically important in today’s world, and United excels in the area of technology, which means Edgewater will take a huge leap forward through this affiliation.” He concludes, “We truly believe that 1-plus-1 will equal 3 through this affiliation.”
United has been assisted by Michael Bell with Honigman LLP and Charley McQueen with McQueen Financial Advisors. Edgewater was advised by Luse Gorman, PC and Donnelly Penman & Partners.
Following completion of the transaction, Edgewater Bancorp and Edgewater Bank will settle their remaining obligations and distribute their remaining cash to the Edgewater stockholders.
Edgewater operates five bank branches in Berrien County and two loan production offices in Fremont and Greenville, Michigan and had approximately $249.1-million in assets as of September 30, 2020. United currently operates 37 branches in six states and has more than 177,000 members. The strategic acquisition of Edgewater will increase United’s branch total to 41 and bring total assets to approximately $3.5-billion.
Edgewater was created in connection with the 2014 mutual-to-stock conversion of Edgewater Bank. As part of that conversion, a liquidation account was created for the benefit of certain depositors of Edgewater Bank. It is anticipated that Edgewater will pay out the balance of that liquidation account to the holders of sub accounts therein in connection with the liquidation.
Edgewater currently estimates that, upon completion of the liquidation, its stockholders will receive between $39.47 and $43.22 in cash consideration for each share of Edgewater common stock (the “per share consideration”) they own, which equates to a deal worth around $33.1-million. The amount of the per share consideration is subject to substantial variation based on, among other things, uncertainties with respect to the treatment of and costs associated with the liquidation account, Edgewater Bank’s equity at closing, the amount of corporate level taxation of such transaction, the amount of cash held by Edgewater Bancorp at closing, costs related to the dissolution of Edgewater Bank and Edgewater Bancorp and future operating results. Based on those factors, investors should not assume that the ultimate consideration distributed to stockholders will be within the range set forth above.
The transaction has been unanimously approved by the board of directors of both institutions and is expected to close in the second quarter of 2021, subject to customary closing conditions, the approval of Edgewater’s stockholders and regulatory approvals. The distribution of cash to Edgewater stockholders is currently expected to occur within 150 days after completion of the transaction, although delays in the process of dissolving Edgewater Bank and Edgewater Bancorp could delay the distribution to stockholders.
For more information about the Edgewater and United announcement or to submit questions you can go to http://theRealUnited.com. Or you can call Edgewater at 800-922-5221, United at 888-982-1400 or reach out to a local Edgewater or United branch at your convenience.
