Nebraska bank fights for right to be sold to Iowa credit union

A Nebraska bank is pushing back on a ruling that blocked its plans to be sold to a credit union.

The Nebraska Department of Banking and Finance in December shot down the proposed sale of the $395 million-asset Premier Bank in Omaha to the $8 billion-asset GreenState Credit Union in North Liberty, Iowa.

The department ruled that the bank failed to provide evidence supporting the legality of the deal.

But in a petition filed Jan. 14 in the District Court of Lancaster County, Premier said the department of banking ignored 90 years of Office of the Comptroller of the Currency precedent and practice that has allowed whole-bank purchases.

Prior to signing the agreement, legal counsel for both Premier Bank and GreenState Credit Union consulted with the Nebraska Department of Banking, which did not raise any objections to the authority of a Nebraska bank to engage in the transaction at that time, according to Chris Maher, chairman and CEO of Premier Bank.

“We believe the recent ruling is an example of the Nebraska Department of Banking bowing to the political pressure of the Nebraska Bankers Association and therefore not allowing Nebraskans free and unlimited access to all financial institutions,” he said in an email.

Michael Bell, an attorney at the law firm Honigman in Detroit who represented GreenState in the deal, said the decision materially lowers the value of Nebraska banks — and their shareholders, board and management should be incensed.

“Nebraska banks' powers have been stripped and their ability to sell has been materially altered,” he said. “The decision calls into question their ability to sell to anyone in a purchase and assumption form. Unfortunately politics has gotten in the way of common sense here and shareholders have been damaged.”

The Nebraska Department of Banking’s decision is bad for Nebraska state-chartered banks, regardless of one’s opinion about the Premier-GreenState transaction itself, said David Routh, the attorney for Premier Bank.

“It calls into question the parity between state banks and national banks operating in Nebraska. It allows the department to second-guess the OCC’s decisions and, by doing so, to deny Nebraska state banks the same rights, powers and privileges that are possessed by national banks in the state,” he said.

Bell predicted that more than 25 deals involving credit unions buying banks could be announced in 2022.

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