United Federal Credit Union and Edgewater Bank Announce Strategic Acquisition
Subject to Regulatory Approval
ST. JOSEPH, Mich., Oct. 27, 2020: United Federal Credit Union (“United”), and Edgewater Bancorp, Inc. (“Edgewater”) (OTCPK: EGDW), the holding company of Edgewater Bank, announced today that they have signed a definitive purchase and assumption agreement whereby United, headquartered in St. Joseph, Michigan, will acquire the assets and assume the liabilities of Edgewater Bank in an all-cash transaction.
Following the completion of the Transaction, Edgewater Bancorp and Edgewater Bank will settle their remaining obligations and distribute their remaining cash (the “Liquidation”) to the Edgewater stockholders. Edgewater Bank 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 over 177,000 members. This strategic acquisition will increase United’s total number of branches to 41 and total assets to approximately $3.5 billion.
Edgewater was created in connection with the 2014 mutual-to-stock conversion of Edgewater Bank. As a part of such conversion, a liquidation account was created for the benefit of certain depositors of Edgewater Bank. It is anticipated that Edgewater Bank will pay out the balance of this liquidation account to the holders of sub accounts therein in connection with the Liquidation. Edgewater currently estimates that, upon the 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. 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 these factors, investors should not assume that the ultimate consideration distributed to stockholders will be within the range set forth above.
Edgewater currently estimates that, upon the 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. 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 these factors, investors should not assume that the ultimate consideration distributed to stockholders will be within the range set forth above.
Statement from United FCU's President & CEO:
“We are excited to announce the acquisition of Edgewater Bank. We look forward to welcoming the Edgewater Bank customers and employees into the United family,” said Terry O’Rourke, United’s President and CEO. “This acquisition will allow us to serve more people and communities in Berrien County, and it will result in expanded product, service and technology offerings for Edgewater Bank’s customers as well. We believe this is an ideal fit, as we are both deeply engaged in the communities we serve, have a strong organizational culture, and strong commitment to our members’ and customers’ financial wellness. Additionally, we are committed to working closely together with our Edgewater Bank partners to work towards as smooth a transition as possible.”
Statement from Edgewater Bank President & CEO:
“We are thrilled about our new partnership with United Federal Credit Union because of the expanded opportunities it brings to our customers, our employees, and our communities,” said Richard E. Dyer, President & CEO of Edgewater Bank. “In addition, United shares our strong commitment to community support.”
About United Federal Credit Union
United Federal Credit Union has served its Members since 1949 by helping them to build a sound financial future. United consists of more than 177,000 Members/owners worldwide and manages assets in excess of $3.2 billion. Its corporate offices and main branch are in St. Joseph, Mich., with additional branches in Arkansas, Indiana, Michigan, Nevada, North Carolina and Ohio. Federally insured by NCUA. Equal opportunity lender. Equal housing lender. For more information visit www.unitedfcu.com.
About Edgewater Bank
Edgewater Bank is a community-based organization offering a full range of financial products and services to businesses and consumers. It was originally organized in 1910, and is headquartered at 321 Main Street, Saint Joseph, Michigan 49085. Edgewater Bank conducts its operations from its main office in St. Joseph, Michigan and four additional full-service banking offices located in Royalton Township, Coloma, Bridgman and Buchanan, Michigan. Edgewater Bancorp, Inc. became the holding company for Edgewater Bank upon consummation of the mutual to stock conversion of Edgewater Bank in January 2014.
About McQueen Financial Advisors
McQueen Financial is a nationwide financial advisory firm serving financial institutions since 1999. McQueen has advised on ~25% of all Credit Union / Credit Union Mergers nationwide, annually.
Transaction Leads
Dan Martin
Director of Transaction Advisory & Valuation