Business Observer recently featured Suncoast Credit Union’s recent acquisition of Miami-based Apollo Bank. The merger happened after Suncoast reached $10 billion in assets. Apollo Bank has $746 million in assets.
The following is an exert from the Business Observer article:
In banking, $10 billion is more than just a really big number. When an institution crosses that threshold with its assets, it becomes subject to several regulations within the Durbin Amendment of the Dodd-Frank Act. One of those is a cap on income from interchange fees, which immediately put pressure on Suncoast’s earnings. And because Suncoast is a credit union, that cap didn’t hurt just a few dozen investors — it hit the more than 861,000 members of the institution.
‘All of our profits go back to our members,’ Suncoast CEO Kevin Johnson says. That meant when Suncoast reached $10 billion in assets, it immediately had about $25 million less to give back to its membership.
Johnson and his board of directors needed a strategy to recoup those losses, with basically tow options: jump-start organic growth or make an acquisition. ‘We did take a look at banks we thought may be for sale,” Johnson says, choosing option one.
Also featured in: Business Observer