Tuscaloosa-based Alabama One Credit Union said Monday it would acquire First Bank of Wadley, marking the fourth proposed purchase of a bank by a credit union in a two-week span.
The deal would be the 15th of its kind this year — one shy of 2019’s record 16 credit union-bank tie-ups.
Financial terms of the transaction, which is set to close by the second quarter of 2023, were not disclosed.
The move would add five branches to Alabama One’s 18-location footprint, expand the credit union’s presence into the eastern part of the state, and push its asset total past $1 billion. Alabama One counts roughly $956 million in assets; First Bank counts $130 million.
“Over time, we’ve seen many banks move out of rural communities. Their strategic goals are different than ours,” Alabama One CEO Bill Wells said in a press release. “It is our mission to partner with the communities we serve, and we do this by bringing more than just brick-and-mortar branches to a small town.”
Monday’s transaction is not Alabama One’s first bank purchase. It proposed buying First Bank of Linden, an $82 million-asset, single-branch institution, in September 2020.
“We are acquiring an exceptional, seasoned team from First Bank [of Wadley] who care deeply for its customers,” Wells said Monday. “Introducing these valued customers to our well-rounded suite of products and services designed for rural banking needs is very exciting to us.”
Credit unions are announcing bank acquisitions at a furious pace in December. The sector saw nine such deals over 2022’s first six months, followed by a summer lull. But in the past 14 days, Veridian Credit Union agreed to buy American Investors Bank and Mortgage; Dort Financial Credit Union agreed to acquire Flagler Bank; and LGE Community Credit Union said it would purchase Greater Community Bank. And now the Alabama One deal.
“We appreciate Alabama One’s recognition of the deep roots First Bank has in our communities,” Royce Ogle, chairman of First Bank of Wadley, said Monday. “I believe that this will be a win-win for all parties involved.”
Continued bank acquisitions by credit unions will likely displease trade groups like the Independent Community Bankers of America (ICBA), which argues that credit unions’ tax-exempt status allows them to offer a higher purchase price and lets them grow more freely than banks.
While 2022’s final tally won’t be the “25-plus” Honigman attorney Michael Bell predicted in January, it does back up Bell’s assertion last month that “a few more [would] announce prior to year’s end.”
Bell told Banking Dive last week that once the economic tumult stabilizes, there will be a sharp rise in activity.
“I think continued geographic expansion [and] diversity will occur,” he said. “You’re going to see these deals occur in places where they haven’t before.”
The Southeast is no stranger to credit union-on-bank M&A. The year’s first two credit union-bank deals took place in Georgia: Atlanta-based Georgia’s Own Credit Union proposed buying Smyrna, Georgia-based Vinings Bank in February. And Warner-Robins, Georgia-based Robins Financial Credit Union announced it would acquire Forsyth, Georgia-based Persons Banking Company in March. Last week’s tie-up between LGE and Greater Community Bank also centers on Georgia.