MUNSTER | Peoples Bank has reached an agreement to buy First Federal Savings and Loan Association of Hammond, gaining two new branches in the first acquisition in its 103-year history.
Pending regulatory approval, the Munster-based community bank will acquire all the assets and liabilities of First Federal, which has a home office on Rimbach Street in downtown Hammond and a branch on Cline Avenue in Highland. First Federal has total assets of $40.7 million, loans of $31.8 million and deposits of $37.6 million.
No cash or other considerations were paid in the transaction, and no shares were issued. Banks have been under financial pressure to consolidate in recent years, and First Federal had been actively looking for a buyer to take it over.
Enter Peoples Bank, a family-managed bank that spans four generations and has locations across Northwest Indiana.
"Peoples Bank is taking a significant step in expanding our community banking franchise and furthering our strategic goals through consolidation," said David A. Bochnowski, chairman and CEO of Peoples Bank and its parent company, NorthWest Indiana Bancorp. "The merging of our two organizations offers opportunities to create operating, investment and managerial synergies while offering First Federal customers a broader menu of traditional and electronic banking products to meet their needs now and in the future."
First Federal has been looking for a buyer for the past year. Peoples Bank was ideal because the two community banks share a similar history of local decision-making, an emphasis on good customer service and commitments to the communities they serve, said John Freyek, president and CEO of First Federal.
"Our goal this past year has been to explore possible relationships that would be meaningful to our customers, employees and the community," Freyek said. "We're excited to partner with Peoples and provide our customers access to a full range of deposit, lending and wealth management product and service options while preserving our community banking roots."
Since it was founded in 1910, Peoples Bank has grown only organically. But a wave of consolidations has been sweeping the industry, as banks seeks economies of scale, said Benjamin Bochnowski, executive vice president and chief operations officer for Peoples Bank.
First Federal wanted a buyer, and it seemed like a great fit for Peoples, Benjamin Bochnowski said.
There is no overlap between the two bank's branches, he said. Peoples is able to expand its retail network, and establish a presence in downtown Hammond. First Federal customers will benefit from new services, such as mobile banking and wealth management.
"We feel that the strong strategic, financial and cultural fit between Peoples Bank and First Federal creates value for all our stakeholders," he said.
Several regulatory agencies will need to approve the deal, which is expected to be closed by April, Benjamin Bochnowski said. The two banks likely would not be fully integrated until July.
Peoples Bank currently has total assets of about $693.4 million. The bank has offices in Crown Point, Dyer, East Chicago, Gary, Hammond, Hobart, Merrillville, Munster, St. John, Schererville and Valparaiso.