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Commercial
Chicago

New York bank halts $98M purchase of Amalgamated Bank of Chicago

Regulatory hurdles cited by would-be buyer, but Chicago party claims there’s no cause to walk away

Amalgamated Bank of Chicago's headquarters at 30 North LaSalle Street (Google Maps, iStock)
Amalgamated Bank of Chicago's headquarters at 30 North LaSalle Street (Google Maps, iStock)

Unity among two union-affiliated banks in Chicago in New York is no longer being pursued.

New York-based Amalgamated Bank’s publicly traded parent Amalgamated Financial has walked away from its attempt to purchase the unaffiliated Amalgamated Bank of Chicago for $98 million dollars, Crain’s reported.

The banks were both founded by clothing workers’ unions, with organized labor still having a major stake in the New York institution, which has withdrawn its application for regulatory approval of the acquisition it announced it was seeking in September.

It cited an “inability” to obtain Federal Deposit Insurance Corporation approval in a statement after the close of trading Friday.

“As a result, AMAL is no longer proceeding with the transaction,” the statement said, using the parent company’s ticker symbol.

Amalgamated Bank of Chicago said the New York company does not have good cause to walk away from the deal.

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“The terms of our agreement with Amalgamated Financial are clear on what triggers termination of this sale,” a spokeswoman for the Chicago bank said in an email to Crain’s. “They have not met that threshold as the door on addressing issues raised by the FDIC to obtain regulatory approval is still open. Amalgamated Financial has an obligation to address those issues, which we believe are not financial in nature, and move forward with refiling their application with the FDIC. Our goal is to help them overcome the issues that have been raised and we are confident that the sale can get back on track.”

The New York bank says it specializes its commercial real estate business on $3 million to 25 million deals in the New York City, Philadelphia, Washington, D.C. and Bay Area metropolitan areas.

Amalgamated of Chicago, which Crain’s reported has little union ownership now, had $1.6 billion in assets at the end of 2021, up from $950 million it had when it agreed to sell to the New York bank.

The Chicago bank’s net income was $4.5 million in 2021, an increase from $3.5 million in 2020, while its 5 percent return on equity in 2021 lower than peer financial institutions, Crain’s reported.

[Crain’s] – Sam Lounsberry ​​

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