Credit union/Community bank mergers often not a mismatch

Strong benefits and cultural alignment can come out of a bank/credit union combination.

Over the last several quarters, the number of credit union mergers has generally been in the 20-25 range. The typical reasons: 1) field of membership expansion, 2) additional products and services, and 3) increasing scale to offset higher regulatory costs.

One area where we are seeing more interest is a credit union acquisition of a bank. Two that come to mind are the acquisition of Calusa Bank by $1.2 billion Achieva Credit Union, Dunedin, Fla., and the acquisitions of Flint River National Bank and Farmer’s State Bank by $323 million Five Star Credit Union, Dothan, Ala.

On the face of it, a credit union acquiring a bank seems like such a mismatch—especially on the cultural front. However, there are more similarities than differences. First off, the majority of community banks with less than $1 billion in assets are privately held, typically by a small group of shareholders or a family. Their missions and vision statements are very similar to those of credit unions. They have a deep relationship focus and are often involved in their communities. So, these private community banks are very credit union-like except for two things: They do more business lending, and they pay taxes.

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