OCEANSIDE, Calif.—After setting a new annual record for credit union purchases of banks last year at 22, the industry begins 2025 with its first bank buy in the Golden State.
The $1.5-billion Frontwave Credit Union here reported it intends to acquire $316-million Community Valley Bank, headquartered in El Centro, Calif.
“Frontwave Credit Union has a long history of making a difference in the community by helping members achieve their financial goals,” said Bill Birnie, president and CEO of Frontwave Credit Union. “We have a strategic commitment to bring the benefits of credit union membership to more people, while reinforcing our position as a strong and reliable financial institution. The addition of Community Valley Bank will allow us to expand our footprint as we continue living out our mission to make financial dreams come true in the communities that we serve every day.”
The CU termed the deal a proactive step taken by two financially sound institutions.
Frontwave made $4.2 million in net income in 2023 and $5.2 million through September of 2024, according to Call Report data. Net worth is 9.39%. Community Valley Bank has shown strong earnings in recent years, making $4 million in net income in 2023 and $3.1 million through September of last year, according to FDIC data.
As is often the case with credit union purchases of banks, business banking skills are one of the reasons for the buy. Community Valley Bank, Frontwave said, offers enhanced business banking services.
“Frontwave has demonstrated its commitment to community banking, and I am enthusiastic about the opportunity we have to partner with Frontwave,” said Jon Edney, president and CEO of Community Valley Bank. “I’m excited for Community Valley Bank employees to join together with Frontwave employees to enhance our financial services and resources for the communities and people we serve.”
A Strong Start To '25
Terms of the deal and timeline for the agreement to close were not disclosed.
The pioneer of CU purchases of banks, Michael Bell, said that after setting a record for CU/bank buys last year, the agreement in California marks a good start for a run at the new annual record in ’25.
“2025 has commenced with an announcement in the first month that happens to be a ‘first-ever’ state,” said Bell, a partner and chair of the Financial Institutions Practice Group at Honigman, LLP, which is representing Frontwave. “We did something similar last year with New York—and we also added West Virginia. More first-ever states will be coming in 2025. About one-fifth of banks that sell continue to exercise their freedom to voluntarily transact with a credit union.”
Bell has been part of more than 75 whole-bank agreements, plus additional bank branch purchases.