VyStar braces for delay in biggest-ever CU-bank merger

VyStar Credit Union in Jacksonville, Fla., and Heritage Southeast Bancorp. in Jonesboro, Ga., are bracing for a delayed closing of the credit union’s pending acquisition of Heritage Southeast Bank.

The $11 billion-asset VyStar and the $1.6 billion-asset Heritage Southeast said in a press release Friday that the termination data for the deal has been pushed back from Dec. 31 to Feb. 28. The financial institutions said when they announced the deal in April that they expected it to close by the end of this year. 

The VyStar-Heritage Southeast merger, if completed, would be the biggest credit union purchase of a bank.

VyStar and Heritage Southeast said they are continuing to pursue regulatory approval from the Federal Deposit Insurance Corp., the National Credit Union Administration, the Georgia Department of Banking and Finance and the Florida Office of Financial Regulation. 

The institutions said they still hope to complete the deal this year, though they “recognize that the timing of regulatory approval and customer notifications may result in” a first-quarter 2022 closing.

VyStar, which originally agreed to pay $27 a share in cash for Heritage Southeast, said it will increase the consideration by an amount equal to Heritage Southeast’s consolidated net profit, after certain deductions, for each month from Oct. 1 through the closing date. So far this year, the banking company’s monthly consolidated net profit has averaged $1.2 million.