IDAHO FALLS, Idaho–Frontier Credit Union is reaching across state lines to acquire First Citizens Bank of Butte, Montana.
The move marks the $697.8-million credit union’s first entry into the state, with Frontier saying the move will offer customers of the $75-million bank advanced digital banking tools, quick online loan applications, and expanded product offerings.
Frontier CU closed 2024 with $1.4-million in net income and net worth of 9.21%. Terms of the deal were not disclosed. Butte is approximately 200 miles north of Idaho Falls.
A ’Dream’
“Having grown up in Dillon (Montana), it’s a dream having this chance to share Frontier with my home state,” CEO Dan Thurm said in a statement. “We’re not just expanding our footprint—we’re extending our mission of helping people build better lives. We can’t wait to be a part of the fabric here in Butte and serve this great community.”
Added Casey Reilly, CEO of First Citizens Bank of Butte, in a statement, “It’s a natural fit—I’m excited our customers will be in the hands of someone who knows what makes Montana special. They know our community, share our values, and appreciate the uniqueness of Butte.”
The proposed acquisition is subject to regulatory approval and shareholder consent.
About the Bank
First Citizens was chartered in 1977, has 13 employees and approximately 1,500 customers, with $53 million in deposits and nearly $33 million in loans on its books.
FDIC data show it posted positive net inome of $171,000 at the end of Q1.
The deal marks the sixth such acquisition of 2024.
Bankers Critical of Deal
The Independent Community Bankers of America (ICBA) issued a statement saying in part, “With the latest interstate acquisition of a tax-paying community bank by tax-exempt credit unions extending into Montana for the first time, it is time for the increasing criticism of credit union tax and regulatory exemptions to finally result in policymaker action.”
Credit Unions Respond
Following the ICBA statements and others made last week by other organizations, America’s Credit Unions’ CEO Jim Nussle issued a statement saying, “Once again, the bankers are peddling misinformation about the credit union industry and conveniently avoiding the facts. When banks choose to sell to credit unions, it’s because it’s the best option for people—their employees, their customers, and their communities. Credit unions keep branches open in places that may otherwise turn into banking deserts. They keep jobs. They keep affordable financial services available to families. Plus, 84% of these transactions involve low-income designated credit unions and every bank sale is subject to an average 25% tax of the purchase price.
More Than 2,400 Times’
“When banks buy banks—which has happened more than 2,400 times since 2012, compared to roughly 100 bank sales to credit unions—they often downsize and stop services. And on the topic of tax, studies show that Subchapter S banks, which don’t pay corporate taxes, don’t pass their tax status savings onto consumers. But credit unions do use their tax status to reinvest in their members and communities. While the bankers are focused on their self-interests to protect their profits, credit unions are focused on people and securing policies that will strengthen our nation.”
Resources Offered
America’s CUs offered these resources/data points related to the issue:
Banks selling to credit unions fact sheet
Banks selling to credit unions research
Economic study on benefits of credit union tax status
- Credit unions accounted for 0.6% of the share of bank assets sold since 2012
- 89% of bank owners cite “retention of employees” as key deciding factor to sell to a credit union
- Since 2014, banks have closed a net of nearly 19,000 branches, while credit unions have opened a net of more than 500
- Credit unions provided $26.9 billion in direct financial benefits to the nation’s 142 million members last year