Gesa Credit Union has announced a definitive agreement to acquire substantially all of the assets and assume substantially all of the liabilities of Willamette Valley Bank from its parent Oregon Bancorp Inc. Post-closing, Willamette Valley Bank and Oregon Bancorp will be liquidated, with remaining value distributed to Oregon Bancorp shareholders at an estimated $43–45 per share. The total consideration has not been disclosed. The transaction is expected to close in the first half of 2027.

The transaction will give Gesa Credit Union its first retail branch network in Oregon, extending its geographic footprint beyond its existing Washington State operations. Willamette Valley Bank's existing branches and employee teams are expected to continue operating post-closing.

The transaction is structured as an asset and liability purchase rather than a bank merger. This distinction has significant legal and regulatory implications:

What Gesa is acquiring. Gesa will acquire substantially all of Willamette Valley Bank's assets — primarily loans, investment securities, and fixed assets — and assume substantially all of its liabilities — primarily deposits. The specific assets to be acquired and liabilities to be assumed will be defined in the purchase and assumption agreement.

What happens to the bank. Unlike a bank merger, where the acquired bank is absorbed into the acquirer, Willamette Valley Bank will cease to exist after the asset transfer. The bank's charter will be surrendered, and the bank will be wound down. Oregon Bancorp, the bank's parent holding company, will also be liquidated, with the proceeds distributed to its shareholders.

Why this structure? Asset and liability purchases are sometimes preferred over mergers when:

• The acquirer is a credit union (which cannot acquire a bank by merger under most state laws)
• The parties want to exclude specific assets or liabilities from the transaction
• The transaction is designed to result in the liquidation of the seller

In this case, the credit union structure of Gesa is the primary driver — credit unions are not permitted to merge with banks under federal and most state laws, so an asset purchase is the only available structure.

NCUA Approval. As a federally insured credit union, Gesa requires approval from the National Credit Union Administration (NCUA) to acquire bank assets. The NCUA will review the transaction for its impact on Gesa's financial condition, capital adequacy, and ability to serve its members.

FDIC and Oregon Division of Financial Regulation. The transfer of Willamette Valley Bank's assets and the surrender of its bank charter require approval from the FDIC (as the bank's deposit insurer) and the Oregon Division of Financial Regulation (as the bank's state chartering authority). These approvals will focus on the orderly transfer of deposits and the protection of depositors.

Washington State Department of Financial Institutions. As a Washington State-chartered credit union, Gesa may also require approval from the Washington State Department of Financial Institutions for the expansion of its operations into Oregon.

Included and excluded assets. The purchase and assumption agreement will define precisely which assets Gesa is acquiring and which are excluded. Excluded assets typically include:

• Non-performing loans above a specified threshold
• Owned real estate that Gesa does not want to operate
• Litigation claims and regulatory proceedings
• Tax assets and deferred tax liabilities

The definition of excluded assets is a critical negotiating point — the more assets that are excluded, the lower the purchase price, but the more complex the wind-down of the remaining bank.

Troubled loans. The treatment of Willamette Valley Bank's troubled loans — non-performing loans, classified assets, and loans in workout — requires careful attention. Gesa should conduct thorough credit due diligence to assess the quality of the loan portfolio and negotiate appropriate representations and warranties regarding loan quality, as well as indemnification for undisclosed credit losses.

Deposit liabilities. Gesa will assume Willamette Valley Bank's deposit liabilities — the obligation to repay depositors. The assumption of deposits is the most significant liability in the transaction and requires careful analysis of the deposit composition (demand deposits, savings, time deposits), the concentration among large depositors, and the risk of deposit runoff following the announcement and closing.

Employee transition. The transaction contemplates the continuation of Willamette Valley Bank's existing branches and employee teams. The purchase and assumption agreement should address the terms of employee transition — which employees will be offered positions with Gesa, on what terms, and what severance or retention arrangements will be provided to employees who are not retained.

Litigation and regulatory proceedings. Any pending or threatened litigation or regulatory proceedings involving Willamette Valley Bank should be identified in due diligence and allocated in the purchase and assumption agreement. Gesa should not assume liability for pre-closing litigation or regulatory proceedings without appropriate indemnification from Oregon Bancorp.

One of the most distinctive features of a credit union's acquisition of a bank is the conversion of bank customers to credit union members. Credit unions are member-owned cooperatives — only members can hold accounts and access services. Bank customers who become Gesa customers post-closing must become Gesa members.

The membership conversion process involves:

• Communicating the transaction to Willamette Valley Bank customers and explaining the credit union membership structure
• Obtaining membership applications from customers who wish to continue banking with Gesa
• Determining eligibility for Gesa membership (credit unions have field of membership requirements that define who is eligible to join)
• Converting customer accounts from bank accounts to credit union share accounts

Field of membership expansion. Gesa's current field of membership may not include all of Willamette Valley Bank's customers. Gesa may need to apply to the NCUA for an expansion of its field of membership to include Oregon residents or the communities served by Willamette Valley Bank's branches.

The integration of Willamette Valley Bank's operations into Gesa's infrastructure will require a core banking system migration — the transfer of customer account data, loan data, and transaction history from Willamette Valley Bank's core banking system to Gesa's system. Core banking migrations are technically complex, operationally risky, and expensive. Key risks include:

• Data integrity — ensuring that all customer data is accurately transferred without loss or corruption
• System compatibility — managing differences between the two institutions' core banking systems, ancillary systems, and data formats
• Customer disruption — minimizing service interruptions during the migration
• Regulatory compliance — ensuring that the migrated data meets all regulatory record-keeping requirements

The core banking migration is typically one of the most significant integration risks in a bank acquisition and should be a focus of pre-closing planning.

The Gesa/Willamette Valley Bank transaction illustrates the growing role of credit unions in U.S. bank consolidation — a trend that has direct relevance for Turkish financial institutions and investors evaluating the U.S. financial services market:

Credit union acquisitions of banks. Credit unions have become increasingly active acquirers of community banks in the United States, driven by their tax-exempt status (which gives them a cost advantage over bank acquirers) and their desire to expand their geographic footprint and product offerings. Turkish financial institutions should be aware of credit unions as potential competitors in community bank acquisitions.

Asset purchase vs. merger. The asset purchase structure used in this transaction is an alternative to a bank merger that may be appropriate in certain circumstances — particularly when the acquirer cannot merge with a bank under applicable law. Turkish investors evaluating U.S. bank acquisitions should understand the differences between asset purchases and mergers in terms of regulatory approvals, liability assumption, and transaction complexity.

Oregon banking market. Oregon is a growing market for financial services, driven by population growth in the Portland metropolitan area and the expansion of technology and healthcare industries. Turkish financial institutions with U.S. market entry plans should consider Oregon as a potential market for banking or financial services operations.

ULF New York advises Turkish financial institutions and investors on U.S. banking acquisitions, credit union transactions, and cross-border financial services matters.