Yuma, Arizona-based AEA Federal Credit Union will purchase substantially all of Goodyear, Arizona-based West Valley National Bank’s assets and assume substantially all of its liabilities in an all-cash deal announced Tuesday that represents the 11th time this year a credit union has bought a bank.
Financial details of the transaction, set to close late in the second quarter of 2024, were not disclosed.
However, the deal stands to double AEA’s brick-and-mortar footprint to eight locations from four and give it entry to the Phoenix and Las Vegas markets.
“Our goal as a certified Community Development Financial Institution is to serve the underserved, and by expanding our footprint eastward into Arizona through this acquisition, we can do so more expediently,” Adele Sandberg, AEA’s CEO, said in a press release.
The move will also add roughly $106 million in assets to AEA’s total, bringing it to $456 million once the deal is finalized.
“This transaction allows West Valley National Bank employees to join together with AEA employees in a shared commitment to deliver quality community-focused financial services and expertise to our collective customers throughout the communities we serve, and allows us to leverage our collective strengths and resources to deliver such services,” West Valley CEO Ronald T. Evans Jr. said in Tuesday’s release.
The deal is the first credit union-bank tie-up to be announced in more than two months, after a flurry of five deals in August. While many of the combinations have been concentrated in the Southeast or Midwest, Tuesday’s marks a relatively rare deal in the Southwest, where just one of 2023’s 11 transactions — Albuquerque, New Mexico-based Nusenda Credit Union’s acquisition of Western Heritage Bank — has spawned.
Michael Bell, an attorney at Honigman and M&A adviser, asserted in August that California stood as “the next frontier” in credit union-bank deals, adding that he “expect[ed] activity there soon.” Tuesday’s deal affects activity in two of the state’s neighbors.
Trade groups like the Independent Community Bankers of America have raised concerns about deals between banks and credit unions, arguing that credit unions’ tax-exempt status allows them to offer a higher buying price than banks and helps them grow more freely.
That hasn’t stopped the trend from perpetuating. Last year saw a record-tying 16 deals announced between credit unions and banks, and 2023 is keeping pace. The 11th tie-up of 2022 was also announced during the first week of November.