NL Financial, a leading financial industry consultancy based in Charlottesville, Va., said Monday that credit unions buying banks as a way to fuel growth is a mini-trends.
SNL reported there were six instances of credit unions buying banks in recent years, with the most recent being the $406 million First Commerce Credit Union’s announcement Aug. 13 it will purchase the $89 million First National Bank. First Commerce is based in Tallahassee, Fla., and First National Bank in Crestview, Fla.
The firm quoted Michael Bell, an attorney at Howard & Howard, who provided consulting services for many of the purchases, as calling it a mini-trend.
“I call it a mini-trend, only because I don’t think you are going to see a thousand of them, but I think you might see a hundred,” SNL quoted Bell as saying. “This is a legitimate, viable strategy for growth for credit unions, no question about it. I think there are forces inside the credit union industry and outside the credit union industry that currently are aligned that make these transactions palatable.”
As credit unions and other financial institutions look for ways to grow, opportunistic acquisitions of small community banks may fit the bill. And with the increasing array of legal and compliance requirements being thrust on all institutions, but hitting smaller FIs the hardest because of their limited resources, some of these smaller FIs may be open to acquisition discussions.
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