DFCU Financial to Acquire MidWestOne’s Florida Operations

Michigan-based credit union DFCU Financial is to buy two Florida branches from MidWestOne Bank in a deal worth an estimated $12 million.

The two organizations announced yesterday that DFCU was to acquire branches in Naples and Fort Myers, as well as $159 million in consumer and commercial deposits and approximately $162 million in loans to DFCU’s Florida footprint.

The transaction follows DFCU’s move to establish a presence in Florida in January 2023 through the acquisition of Tampa-based First Citrus Bank. With the addition of the MidWestOne branches, DFCU will have a total of eight branch locations in Florida.

MidWestOne, meanwhile, is exiting Florida as part of a long-term strategic shift. The Iowa-headquartered company has decided to focus on core markets in the Twin Cities, Denver, and Metro Iowa regions.

Charles Reeves, MidWestOne’s CEO, said: “While our Florida operations have been performing well, we never reached the scale to allow this market to become a growth driver for MidWestOne without significant investment.”

MidWestOne will receive a deposit premium of 7.5%, or approximately $11.9 million, pre-tax, based on its deposits as of June 30, 2023.

According to a statement from the credit union, employees will be retained by DFCU and will continue to work in the same branches and in similar roles as they currently hold at MidWestOne.

Ryan Goldberg, president and CEO of DFCU, said: “This move enhances our capacity to serve our members and communities in Florida, providing additional convenience and local expertise. Plus, it opens up exciting financial solutions to MidWestOne’s clients on the southern Gulf Coast of Florida, adding even more value to our growing membership and community.”

The deal is the latest in a flurry of transactions involving banks and credit unions this month. In response, Independent Community Bankers of America called for congressional action over bank deals involving credit unions.

The trade body urged Congress to investigate the credit union tax exemption and “its harmful impact on local communities”.