ELGA Credit Union in Grand Blanc, Michigan, said Tuesday it agreed to acquire Marine Bank & Trust in Vero Beach, Florida, in a bid to expand its footprint and commercial lending operations.
The $1.5 billion-asset ELGA said the all-cash transaction, expected to close early next year, would combine its consumer and low-income lending expertise with Marine Bank's commercial and treasury management offerings. The credit union would also gain a physical presence in Florida, with the $650 million-asset Marin Bank's five branches along the state's east-central coast.
Upon completion, ELGA would have total assets of $2.2 billion, serve more than 105,000 members and operate 18 branches in Michigan and Florida.
"This highly complementary transaction will allow us to bring our expertise in consumer banking and low-income lending to Marine Bank's communities, while gaining extensive business banking experience," Terry Katzur, president and CEO of ELGA, said in a press release. "With our combined resources and capital, we will be poised to better serve members and businesses in Michigan and Florida for years to come."
The deal marks the 12th announced this year involving a credit union buying a bank. That eclipses the
Credit unions are pursuing bank targets to gain scale and diversify their business lines. Historically, credit unions have served consumers in relatively limited markets.
Small banks, meanwhile, are selling because some lack the size and resources needed to cover mounting regulatory and technology costs.
These deals, however, have drawn criticism. The Independent Community Bankers of America and other banking industry advocacy groups argue that credit unions are exempt from federal taxes because they are supposed to focus on underserved groups or markets. When they buy banks, however, they move beyond their mission and simultaneously remove tax revenue and competition from communities, the ICBA contends.
"ICBA and the nation's community banks have repeatedly warned about the dangers of tax-exempt credit unions acquiring tax-paying community banks, and this dangerous trend is only accelerating — accounting for roughly a quarter of this year's banking industry acquisitions," ICBA President and CEO Rebeca Romero Rainey said Tuesday.
"While states such as Tennessee, Colorado, Minnesota, Mississippi and Nebraska have acted to restrict these deals, Congress should respond to what is clearly a national issue with implications for local communities from coast to coast," she added.
Because of their tax status and resulting lower expense base, credit unions are able to afford higher price tags and, as such, are winning an increasing share of bank acquisition deals, according to S&P Global Market Intelligence. The firm said credit unions this year are on pace to account for a larger share of the industry's M&A deals than in any previous year.
About 50 bank sales have been announced in 2024, according to S&P Global data.
Should the deal announced Tuesday close as planned, Marine Bank CEO Bill Penney would become the combined organization's Florida market president and retain local decision-making authority.
With ELGA's "wealth of knowledge serving communities and individuals that don't typically have access to banking services, we will be able to expand our base of customers in east-central Florida," Penney said in the release.
ELGA said it has committed to maintaining all Marine Bank jobs and banking centers.
