ESL Federal Credit Union entered into a definitive purchase and assumption (P&A) agreement to acquire substantially all assets and liabilities of Generations Bank and its parent company Generations Bancorp NY, Inc. in an all-cash transaction. The deal is the 16th this year involving a credit union taking majority ownership of a bank.
As consideration for the P&A transaction, ESL Federal will pay Generations $26.2 million in cash and Generations Bank will retain its equity when the agreement becomes effective, minus certain reductions and additions, according to a press release issued by the credit union. Once the deal closes, ESL Federal will have approximately $9.6 billion in total assets.
“This deal is a strong fit for ESL and Generations because both organizations are committed and dedicated to serving their employees, customers and their communities,” ESL Federal President and CEO Faheem Masood said in the release. “We look forward to our future as a stronger, growing financial institution, and bringing the superior experiences we are known for to employees and customers in new communities.”
ESL Federal indicated the acquisition will increase its footprint to more than 30 full-service branches throughout the Greater Rochester and Finger Lakes region. The credit union currently offers personal banking, business banking, mortgage services and wealth management throughout Seneca, Cayuga, and Orleans counties, and the acquisition would expand its footprint in Ontario County.
The agreement received unanimous approval from both organization’s boards of directors and is expected to close next year, either late in the second quarter or sometime in the third quarter, provided all necessary regulatory approvals are met and Generations Bancorp’s shareholders agree to the closing conditions.
"We are very excited about our new partnership with ESL Federal Credit Union,” Generations Bank President and CEO Angela Krezmer said. “The synergy created by combining these two companies coupled with the financial strength of the combined institution will assure that our customers, our employees and our communities have expanded financial services and membership benefits going forward. We also believe it reflects our commitment to enhance the value to our shareholders.”
Generations Bancorp's shareholders will receive an estimated aggregate of between $18 and $20 per share, which will likely be distributed in two payments within six to nine months of the closing date, the release states. Generations Bancorp currently has 2,241,801 outstanding shares of common stock.