Bend-based High Desert Bank has been acquired by Mid Oregon Credit Union, following approval from federal banking regulators, the credit union announced Wednesday.

The bank, which has been in operation since 2007 with one location, had about $21 million in assets and about 400 customers. All five employees were offered positions at Mid Oregon Credit Union, and customer accounts were converted on Monday, said Bill Anderson, Mid Oregon Credit Union president and CEO.

The acquisition by Mid Oregon comes after High Desert tried in 2017 to merge with a California mortgage company. The bank had previously come under scrutiny by banking regulators.

Anderson did not disclose how much Mid Oregon paid for the bank. The acquisition was approved at the end of May, Anderson said, and on Monday the High Desert Bank office was closed. That day the bank called all the customers and ensured that all had their new debit cards and checks.

“We did everything we could to make sure this was one of the best transitions for the customers,” Anderson said. “It was a small bank and the credit union has had healthy growth.”

Damon Runberg, regional economist for the Oregon Employment Department, praised the acquisition from one local financial institution to another. “You rarely see a local bank acquire another local bank,” Runberg said. “It’s super cool. It’s the opposite story you usually hear in the banking industry. It’s exciting that one of our local financial institutions is in the position of expanding right now.”

The former CEO of High Desert Bank, Steve Ferber, is working at the credit union as director of commercial markets, Anderson said.

“We’re seeking a good financial institution that would be a fit for our customers and allow us to wind down our operations in an orderly fashion,” Ferber said in a prepared statement. “Mid Oregon is a strong, local organization that adds value to the financial needs of our High Desert customers.”

High Desert had tried to merge with Right Start Mortgage of Pasadena, California in 2017, but bank regulators put the brakes on the merger. Prior to that, High Desert had been operating under a cease and desist order for “unsafe or unsound banking practices, including those related to capital levels, asset quality and earnings,” according to a U.S. Department of Treasury Office of the Comptroller of the Currency legal order.

Anderson did not respond to an email query about the bank’s status with federal regulators.

In addition, Lawrence Snyder, High Desert Bank’s CEO from 2007 to 2012, was accused by the comptroller’s office of overstating his expenses and falsifying his expense reports by at least $13,821. According to legal documents, he later reimbursed the bank $55,000 and was fined $15,000.

Mid Oregon, which has seven branches, has been operating in Central Oregon since it began in Prineville in 1957. The credit union has more than 31,000 members and $303 million in assets and $278 million in deposits and liabilities, Anderson said.

— Reporter: 541-633-2117, sroig@bendbulletin.com

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