RAINBOW CITY, Ala.—The $1-billion Family Savings Credit Union said it intends to purchase two branches from Huntsville, Ala.-based Merit Bank.
The deal continues the torrid pace of CU whole-bank purchases and branch buys, making this the third such agreement in just over a week.
As CUToday.info reported, late last week OneAZ Credit Union announced it intends to buy 1st Bank Yuma, setting the one-year record for these agreements at 17. On Wednesday, HAPO Community Credit Union announced it intends to acquire Community First Bank.
Offices Acquired
Family Savings will acquire the Valley Head, Ala., Ider, Ala., offices of Merit, the CU said.
Under the terms of the agreement Family Savings will acquire the physical locations and most of the deposit and loan accounts associated with the branches, the CU reported.
The deposits and loans to be conveyed by Merit to Family Savings are approximately $27 million and $4 million, respectively. Merit will continue to operate through its headquarters location in Huntsville. Terms of the deal were not disclosed.
The deal is subject to customary closing conditions as well as approval by applicable regulatory authorities. It is expected to be completed in the first half of 2025, the CU stated.
“We are thrilled about the proposed acquisition of the Valley Head and Ider branches,” said Danny Varnon, president and CEO of Family Savings. “We have growth plans for Dekalb County and this allows our expansion to be immediate, and the branches tie in well with our existing franchise in northeast Alabama and northwest Georgia. We are committed to serving markets such as Valley Head and Ider and look forward to welcoming Merit’s Dekalb County customers as the newest members of Family Savings.”
“We believe this transaction is a win-win for our bank and our customers,” said Will Heaps, president and CEO of Merit. “It allows us to better focus on our core market of Huntsville and ensures our customers in Dekalb County will continue to receive the same exemplary service they are accustomed to. We look forward to serving our ongoing Merit customers in our home market of Huntsville and know that our Dekalb County customers will enjoy becoming members of Family Savings.”
Family Savings was advised in the transaction by Honigman LLP as legal counsel. Olsen Palmer LLC served as Merit’s financial advisor while Jones Walker LLP served as Merit’s legal advisor.
Agreements Are Wins For Communities
The pioneer of CU purchases of banks, Michael Bell, said the three deals within a week indicate how banks view sales to credit unions as a good option and how the buys serve their communities.
“These deals would not be happening at this pace if those things were not true,” said Bell, a partner and chair of the Financial Institutions Practice Group at Honigman, LLP, addressing bank trade groups’ attacks on these sales. “These are good for the buyer, the seller and the people who live in the towns the credit now serve.”
Bell has been part of more than 65 whole-bank agreements, plus additional bank branch purchases.
Pace Heats Up Bank Attacks On Deals
The pace of credit union purchases of banks has also heated up bank trade groups’ opposition to the agreements. Independent Community Bankers of America President and CEO Rebeca Romero recently pointed out that credit unions have accounted for “roughly a quarter” of this year’s banking industry acquisitions, and again called for Congress to investigate whether credit unions should be able to acquire banks given their tax and regulatory exemptions.