904 356-JOBS (5627)

904 356-JOBS (5627)

Shooting for the Stars (Courtesy of the Jacksonville Business Journal) — About nine months ago, Brian Wolfburg sat down with Heritage Southeast Bank CEO Leonard Moreland at the Bohemian Hotel Savannah Riverfront for a conversation about their institutions.

The chat lasted for more than 10 hours.

“What we found was more commonality between us (than thought),” Wolfburg said, “and that we were in agreement on what we were trying to achieve and the people we were trying to serve.”

Now, those people will be served by VyStar.

Last week, Jacksonville’s largest credit union announced it was acquiring Heritage Southeast Bank of Jonesboro, Georgia, in what would be the largest acquisition of a bank by a credit union ever.

The deal — in which VyStar would pay $195.7 million, according to Heritage Southeast’ financial advisers — would see the credit union grow its assets to about $12.5 billion, its membership to 850,000 and its number of branches to 88. It would make the organization the 13th largest credit union in the country and put it on the verge of overtaking Tampa-based Suncoast as the largest operation in Florida.

As well as the impact on the organization, VyStar’s growth is also significant for the First Coast.

“Being able to talk about that growth here in Jacksonville, that puts us on the map,” said Aundra Wallace, president of JaxUSA Partnership, the economic development arm of JaxChamber. ”Their success is the region’s success. As far as a financial services company here in Northeast Florida, their continued growth is very important to the region.”

The history

When Wolfburg took over as CEO of VyStar Credit Union three and a half years ago, he took charge of an organization with about $6.9 billion in assets and just over half a million members — a good base on which to grow.

And since October 2017, that’s what VyStar has done.

At the end of 2020, the organization had $10 billion in assets and almost 750,000 members — a 45% jump in assets and a 32% jump in members since Wolfburg arrived.

The roots of that growth were planted 1952, when the organization originally known as Jax Navy Federal Credit Union was founded with 12 members to serve the sailors and civilians working at Naval Air Station Jacksonville.

In 2002, after having become state chartered the previous year, the credit union received permission to serve anyone living or working in Duval, Clay, Nassau, St. Johns and Baker Counties. Changing its name to VyStar, it then began expanding, adding eight more counties in 2003, and getting up to 22 counties by 2017.

Then the growth accelerated.

In 2018 — the same year it bought the office tower it is now turning into a downtown campus — the organization expanded into Georgia as well as elsewhere in Florida, bringing its service area to 53 counties across the two states.

In 2019, it acquired Citizens State Bank in Perry, giving it a presence in all North and Central Florida counties.

That growth didn’t surprise Patrick La Pine, who as CEO of the League of Southeastern Credit Unions & Affiliates has been working with and observing credit unions across the region for more than a decade.

“Before Brian Wolfburg took over as CEO, in a lot of ways, VyStar was like a sleeping giant,” La Pine told the Business Journal last week. “If you looked at their capital, you know prior to Brian taking over, they were already established. You know they were really poised to go to the next level. And I think Brian and his team did a really good job and have been very innovative, very forward-thinking, in their approach to growing the credit union and diversifying revenue streams.”

Wolfburg agrees

“Our organization was a sleeping giant –– a very large financial institution within the Jacksonville community, even within Florida, and within the credit union industry — but typically operated on a low cost model, and really flown under the radar,” Wolfburg said.

Awaking that giant was one of Wolfburg’s goals when he joined VyStar.

“The financial services space is changing so quickly that we didn’t have the luxury of doing nothing, we would have fallen,” he said. “If we did not make changes if we didn’t make investments in ourselves.”

The growth hasn’t been for growth’s sake, though.

As a larger organization, Wolfburg told the Business Journal on Friday, the credit union is better poised to serve its members.

“We were looking to grow the organization to gain scale and gain efficiency, to diversify our risk into new markets,” Wolfburg said. “We knew that the state of financial services was changing, and big banks kept getting bigger, fintech started entering our space.”

Branching outside of Jacksonville is a key part of that strategy.

“We’ve done a lot, like reinventing ourselves and our systems, our policies, our procedures, our branches – all of that – and then laid out in organic growth strategy,” he said. “We’ve been pursuing that and we always knew that we would continue to push on that long term.”

In acquiring Heritage Southeast, VyStar is picking up a 66-year-old institution — and one that has been acquisitive on its own in recent years.

Founded as Clayton County Savings and Loans in 1955, it became Heritage Bank in 1997. Two years ago, it rolled up Providence Bank and The Heritage Bank into Heritage Southeast Bank, an organization that as of the end of 2020 had $1.5 billion in assets and 288 employees.

As a community bank, Heritage Southeast has a culture that should make it a good match for VyStar, Wolfburg said.

“They’re trying to serve their markets and they’re trying to bring financial services to individuals and do good in their community,” Wolfburg said. “And that’s exactly what we work to do as a credit union.”

VyStar is not the only credit union to see the value in acquiring community banks, a trend that began accelerating in 2018: According to S&P Global Market Intelligence and federal regulators, 22 banks were bought by credit unions in 2018 and 2019, compared to 14 in the five years before that.

Photo courtesy of vystar.com