Five Star Credit Union in Dothan, Alabama, announced its second bank acquisition in a week. So did Michigan State University Federal Credit Union in East Lansing.
The $775 million-asset Five Star said late Thursday that it agreed to buy Abbeville, Georgia-based Wilcox County State Bank. It said the cash deal would be structured as a purchase and assumption transaction; it did not disclose other financial terms of the deal for the $178 million-asset Wilcox, which it expects to close by the second quarter of 2024.
On Monday, Five Star said it plans to
"Five Star Credit Union is member-focused, and our purpose is to brighten the financial future of the communities we serve. Wilcox County State Bank has similar values for its customers," Bob Steensma, president and CEO of Five Star, said in a press release announcing the deal.
Should both of the deals be completed as planned, Five Star would have 23 branches in Alabama and Georgia — and it will have purchased four banks in the past decade. The other two are
The $7.7 billion-asset MSUFCU, meanwhile, said Thursday night that it has agreed to buy the $145 million-asset Algonquin State Bank in the Chicago metropolitan area. The cash transaction is projected to be completed in the first quarter of 2024.
The Algonquin State deal continues MSUFCU's strategy to expand in the Chicago area, diversify its assets as well as add talent and expertise, the company said in a press release. Earlier this week, the credit union announced a plan to
The post-acquisition MSUFCU, including Algonquin and McHenry, would have approximately $9 billion of assets by the end of 2024 as well as 10 branches in Illinois and 35 branches across two states, the company said.
The pace of credit union deals to buy banks had been slow in the first part of this year, but five were announced in the past week — including Innovations
Attorney Mike Bell, who advised Five Star on its deals, said "the pace has really accelerated" in a matter of a few days.
"I do expect this to continue," he said, though not at the torrid rate of the past week. "There are forces at the smaller level of banking that are driving sales, and strategies in credit union-land that are driving the buyers."
Community banks are struggling to keep pace with mounting technology costs, while credit unions are buying banks to diversify their business lines and expand their geographic footprints.
Meanwhile, deals between banks remain few and far between this year.
Year-to-date aggregate deal value was $2.15 billion for all 51 such deals announced through July, according to S&P Global Market Intelligence data. There were 98 deals announced over the same period in 2022, with an aggregate deal value of $4 billion.
More than half of the bank deals announced this year, 26, involved targets headquartered in the Midwest, making it the most active region, according to the S&P data.
