The sale of Richmond-based West End Bank to a Fort-Wayne based credit union is underway.
The all-cash purchase and assumption agreement transaction was announced Aug. 1.
West End Bank, which has operated since 1894, has four bank branches in Richmond, Liberty and Hagerstown. It had approximately $298.8 million in assets, 24,000 customers and 82 employees as of March 31.
3Rivers currently operates 16 branches in a seven-county area in northeast Indiana and northwest Ohio, and has 82,000 members. It has existed since 1935.
All 4 West End banking locations will operate as branches of 3Rivers after the sale is finalized, according to a press release.
“We look forward to getting to know and investing in Wayne and Union counties, as we begin the transition process,” said Don Cates, 3Rivers’ president and CEO, in the news release. “We mutually feel that this is an ideal fit, as we are both deeply engaged in the communities we serve, have a strong organizational culture, and a sincere care for our members’ and customers’ financial wellness.”
West End Bank customers will become members of 3Rivers with full access to the credit union’s wide array of products and services as well as its larger lending limit, the release said.
The acquisition of West End will increase 3Rivers’ total number of branches to 20, members to 106,000, more than 400 employees, and total assets to approximately $1.4 billion.
The transaction has been unanimously approved by the board of directors of both institutions and is expected to close in the first quarter of 2020, subject to customary closing conditions, the approval of West End Indiana Bancshares’s stockholders, West End Bank’s depositors (if required) and regulatory approvals.
After the transaction is complete, West End will settle its remaining obligations and distribute its remaining cash to West End Indiana Bancshares stockholders, according to the release.
West End Indiana Bancshares was created in connection with the 2012 conversion of West End Bank’s prior federal mutual holding company from the mutual to the stock form. As a part of such conversion, a liquidation account was created for the benefit of certain depositors of West End Bank.
However, because the sale of assets and liabilities of a bank that had converted from mutual to stock form under the current federal rules to a credit union has not yet been implemented by any other institution, there are certain uncertainties associated with the treatment of the liquidation account, the release said.
As a result, it can’t be predicted whether the organization will be required to distribute the remaining liquidation account to certain depositors of West End Bank, the amount of any such distribution, and the ultimate impact of any required payments on the amount of cash to be received by West End Indiana Bancshares stockholders in this transaction.
Under the terms of the purchase and assumption agreement, West End Bancshares estimates that its stockholders will receive between $34.91 and $36.81 in cash consideration for each share of West End Indiana Bancshares common stock. However, several factors could change that amount, such as:
The treatment of and costs associated with the liquidation account
* West End Bank’s equity at closing
* The amount of corporate level taxation of such transaction
* The amount of cash held by West End Indiana Bancshares at closing
* Costs related to the dissolution of West End Bank and West End Indiana Bancshares and the distribution of the remaining assets to stockholders and future operating results
* Costs associated with employee compensation and benefit arrangements
* Any West End Bank environmental problems with remediation costs over a threshold amount.
The distribution of cash to West End Indiana Bancshares, Inc. stockholders is expected to occur within several months after completion of the sale of assets to 3Rivers.
West End Indiana Bancshares will provide its stockholders with a proxy statement and other relevant documents concerning the proposed transaction before stockholders are to make a decision.
By Millicent Martin Emery