2020 - Edgewater

Edgewater Bank and United Federal Credit Union Announce Strategic Acquisition

THE TRANSACTION

On October 27, 2020, United Federal Credit Union (“United”), and Edgewater Bancorp, Inc. (“Edgewater”) (OTCPK: EGDW), the holding company of Edgewater Bank, announced that they have signed a definitive purchase and assumption agreement whereby United, headquartered in St. Joseph, Michigan, will acquire the assets and assume the liabilities of Edgewater Bank in an all-cash transaction (the “Transaction”). Following the completion of the Transaction, Edgewater Bancorp and Edgewater Bank will settle their remaining obligations and distribute their remaining cash (the “Liquidation”) to the Edgewater stockholders. Edgewater Bank operates five bank branches in Berrien County and two loan production offices in Fremont and Greenville, Michigan and had approximately $249.1 million in assets as of September 30, 2020. United currently operates 37 branches in six states and has over 177,000 members. This strategic acquisition will increase United’s total number of branches to 42 and total assets to approximately $3.5 billion.

Edgewater was created in connection with the 2014 mutual-to-stock conversion of Edgewater Bank. As a part of such conversion, a liquidation account was created for the benefit of certain depositors of Edgewater Bank. It is anticipated that Edgewater Bank will pay out the balance of this liquidation account to the holders of sub accounts therein in connection with the Liquidation.

Edgewater currently estimates that, upon the completion of the Liquidation, its stockholders will receive between $39.47 and $43.22 in cash consideration for each share of Edgewater common stock (the “per share consideration”) they own. The amount of the per share consideration is subject to substantial variation based on, among other things, uncertainties with respect to the treatment of and costs associated with the liquidation account, Edgewater Bank’s equity at closing, the amount of corporate level taxation of such transaction, the amount of cash held by Edgewater Bancorp at closing, costs related to the dissolution of Edgewater Bank and Edgewater Bancorp and future operating results. Based on these factors, investors should not assume that the ultimate consideration distributed to stockholders will be within the range set forth above.

The Transaction has been unanimously approved by the board of directors of both institutions and is expected to close in the second quarter of 2021, subject to customary closing conditions, the approval of Edgewater’s stockholders and regulatory approvals. The distribution of cash to Edgewater stockholders is currently expected to occur within 150 days after completion of the Transaction, although delays in the process of dissolving Edgewater Bank and Edgewater Bancorp could delay the distribution to stockholders.

Our Client

EDGEWATER BANCORP, INC.

Edgewater Bancorp, Inc. is the bank holding company of Edgewater Bank. Edgewater Bank is a community-based organization offering a full range of financial products and services to businesses and consumers. It was originally organized in 1910, and is headquartered at 321 Main Street, Saint Joseph, Michigan 49085. Edgewater Bank conducts its operations from its main office in St. Joseph, Michigan and four additional full-service banking offices located in Royalton Township, Coloma, Bridgman and Buchanan, Michigan. Edgewater Bancorp, Inc. became the holding company for Edgewater Bank upon consummation of the mutual to stock conversion of Edgewater Bank in January 2014.

Transaction Partner

UNITED FEDERAL CREDIT UNION

United Federal Credit Union has served its Members since 1949 by helping them to build a sound financial future. United consists of more than 177,000 Members/owners worldwide and manages assets in excess of $3.2 billion. Its corporate offices and main branch are in St. Joseph, Michigan, with additional branches in Arkansas, Indiana, Michigan, Nevada, North Carolina, and Ohio.

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Financial Institutions
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Financial Institutions
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Financial Institutions