A New Mexico-based credit union is bulking up in its home town, acquiring two branches from the $20.3 billion-asset Mountain America Credit Union in Sandy, Utah.
Members of Mountain America's two branches in Albuquerque, New Mexico, approved the transaction earlier this month, paving the way for their acquisition by Sunward Credit Union. Expected to close early next year, the deal will result in Mountain America's exit from New Mexico. No terms were disclosed.
Mountain West said in a press release it entered into the agreement with Sunward to focus on other geographies. Mountain West operates more than 100 branches in Utah, Nevada, Arizona and Idaho. A spokesperson had not responded to a request for comment at deadline.
For the $4.2 billion-asset Sunward, founded in 1948 by employees of Sandia National Laboratories, Albuquerque is a core market. Sunward's presence includes its headquarters and six other branches. "This addition will strengthen our position and ability to deliver on our goal of making banking better in the Southwest, and in New Mexico specifically," Sunward CEO Steph Sherrodd said in a press release.
Albuquerque credit unions have been active acquirers in 2024. The most prominent deals, however, involved banks. In March, the $4.9 billion-asset Nusenda Credit Union completed a
Branch sales between credit unions are relatively infrequent events, with about five taking place in any given year, Michael Bell, a partner with the Honigman law firm who specializes in credit union deals, said Tuesday in an interview. Like Mountain America's agreement with Sunward, most involve one institution seeking to "right-size its footprint," Bell said.
While credit union branch deals typically involve cash consideration for property, as well as a deposit premium, "I do believe there is an altruistic motive as well," with sellers often concluding the buyers can better serve their members, Bell said.
Bell expects branch sales to occur more frequently, with credit unions that have shifted from employment-based fields of membership to ones that are geographically-oriented moving to exit markets that made sense once but are now distant from the core service area.
"Many credit unions do have odd footprints based on their historical genesis," Bell said.
Sunward underwent a name change, from Sandia Laboratories Federal Credit Union, earlier this month.
