Last May (JRN 39:20), we reported that regulators were becoming more critical of CU-bank acquisitions. At least one such deal was cancelled in 2022 as a result. 4-Star Vystar CU, Jacksonville, Florida, unable to get any state or federal regulator to approve its bid for 3½-Star Heritage Southeast Bank, Jonesboro, GA, finally called it off. This is the exception, though, not the rule.
Both institutions finally got deals approved ...with like-institutions.
On January 1st, Heritage Southeast Bank became part of 5-Star First Bank, Hattiesburg, MS. Just a few days later, on January 7th, Vystar CU acquired 4-Star First Coast FCU, Jacksonville, FL.
First Coast FCU, with just over $10 million in assets, hardly compares with the $1.6 billion that Heritage Southeast Bank would have brought to Vystar CU, but that size may well have been the problem. Had it received the required approvals, a Vystar-Heritage Southeast combo would have marked the largest CU-Bank acquisition to date.
Several CU-bank acquisitions were approved last year, but all of the target banks have less than $1 billion in assets. The largest was $847 million Commerce State Bank, West Bend, WI, which was merged into 5-Star Summit Credit Union, Madison, WI in October. Summit CU now boasts assets of $6.2 billion. It is one of three CUs that can be found on both page 2 & page 5.
All credit unions on page 2 applied to acquire banks in 2022. We have the buyer and seller both listed as well as the current status of the transaction. The 52 CUs listed on page 5 each had more than 28% asset growth during calendar 2022 (in some cases much more).
While three CUs can be found on both pages 2 & 5, Summit CU is the only one where the growth is attributable solely to the purchase of a bank. Whether that will be the case in 2023 is still anyone’s guess.
The other two included: 5-Star Georgia’s Own CU, Atlanta, GA, which, in addition to acquiring the $523 million Vinings Bank, Smyrna, GA, also purchased the $253 million United 1st CU, Kingsland, GA in 2022. That double-header put this one onto page 5.
And 4-Star Credit Union 1, Rantoul, IL hasn’t even completed its bank purchase yet. But, it acquired three credit unions in 2022 (one in Georgia and two in Illinois). They ranged from $11 million to $208 million in assets.
There was one other CU-bank deal approved in 2022, but it only involved branches. 5-Star Spokane Teachers CU, Liberty Lake, WA received approval to purchase four branch offices from 5-Star Banner Bank, Walla Walla, WA. This is the second such transaction involving these two institutions. In 2019, Spokane Teachers bought one Idaho branch from Banner Bank.