Blink and the number of banks bought by credit unions in 2022 has doubled to four.
Madison, Wisconsin-based Summit Credit Union said Thursday it would buy substantially all of the assets and liabilities of West Bend-based Commerce State Bank. Terms of the deal, which is expected to close in the third quarter, were not disclosed.
“We have similar values, cultures and dedication to the highest levels of member and community service,” Summit CEO Kim Sponem said in a press release. “Commerce State Bank’s stellar commercial lending portfolio adds to our strengths in mortgage and small business lending, as well as helping people with their everyday financial needs.”
Sponem will serve as CEO of the combined organization after the deal finalizes. Buying Commerce would add four locations to a Summit network that is already 50-strong. It would also bolster Summit’s asset total by $835 million — pushing the credit union past $5.6 billion.
“When we opened Commerce State Bank nearly 17 years ago, we focused all efforts on serving our four core constituencies: clients, employees, communities and shareholders. Combining with Summit Credit Union significantly benefits each of them,” Commerce CEO Joe Fazio said in the press release. “This transaction is about growing to serve current clients, expanding to new communities, rewarding our shareholders and providing career opportunities for employees of the combined company.”
The Madison market is no stranger to deals between banks and credit unions. Iowa-based Dupaco Community Credit Union agreed in October to buy Madison-based Home Savings Bank — one of 13 bank takeovers by credit unions in 2021.
An uptick in such deals is bound to upset trade groups such as the Independent Community Bankers of America (ICBA), which argues credit unions’ tax-exempt status allows them to offer a higher purchase price in acquisitions than banks can, and lets them grow more freely.
Michael Bell, co-leader of the financial institutions practice group at Honigman, said he expects the flurry of deals to continue. “I expect 25-plus to announce [in 2022]. … My prediction is based on the work and deal flow I am seeing,” he told American Banker in January. “I have never seen so much activity.”
At this year's current pace of deals, that math is nearly spot-on. Credit unions agreed to buy four banks in 2022's first 62 days — which would put the acquisition total at 23 if that rate were to be sustained through December. That would easily top 2019's record of 16 bank purchases by credit unions.
One deal that may have gone under the radar is Bossier City, Louisiana-based Barksdale Federal Credit Union's agreement to buy HomeBank of Greenbrier, Arkansas. The bank's board of directors signed off on the acquisition Feb. 25, according to Talk Business & Politics.
Buying the $74 million-asset bank would give Barksdale five extra locations and a footprint in Arkansas for the first time. The $2 billion-asset credit union had previously operated only in Louisiana and Texas.
HomeBank CEO John Stacks said all of the assets of the bank's parent company, Peoples Home Holdings, were acquired for an undisclosed sum, pending regulatory approval. Stacks told TB&P he planned to stay on through the transition — the deal is expected to close in the third quarter — but he plans to leave the business this year to focus on his farming and manufacturing businesses.
HomeBank had struggled in recent years — posting net losses in each of the past three, though the losses were progressively smaller: $984,000 in 2019, $419,000 in 2020 and $50,000 in 2021 despite making a profit through last year's first three quarters.
The Wisconsin and Arkansas deals, taken together with Robins Financial Credit Union's proposed acquisition Tuesday of Georgia-based Persons Banking Company, mean three credit unions have moved to buy banks over the past week.
The marketplace can see runs on credit union-bank tie-ups. Five of last year's 13 such deals came in a 15-day span in August.
Atlanta-based Georgia’s Own Credit Union said last month it would send to regulators a proposal to buy fellow Georgia institution Vinings Bank, kicking off 2022's credit union-bank activity.