The first credit union-buying-bank deal of 2025 is also the first such deal ever struck in California.

On Wednesday morning, the $1.5 billion-asset Frontwave Credit Union in Oceanside said it agreed to acquire the $316 million-asset Community Valley Bank in El Centro.

Frontwave will pay $56.4 million in cash for the bank in a deal that is expected to close in the second half of 2025.

“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,” said Bill Birnie, President and CEO of Frontwave Credit Union, in the release.

The deal is the first announced this year in which a credit union is buying a bank.

There were 22 CU-bank deals announced last year – the most ever. Most recently, the $839 million-asset Zeal Credit Union in December said it plans to acquire Gogebic Range Bank of Ironwood, Michigan – the banking arm of West End Financial Corp.

Attorney Mike Bell of Honigman, who advised Frontwave on the transaction, said 2025 has commenced with an announcement in the first month that also happened to land in a “first ever” state.

Historically, many of the CU-bank deals that have been struck involved community banks in Florida, Illinois, Washington and a handful of other states.

No California bank has ever sold itself to a credit union.

“We did something similar last year with New York and we also added West Virginia, and more ‘first ever’ states will be coming in 2025,” Bell said. “About one-fifth of banks that sell continue to exercise their freedom to voluntarily transact with a credit union.”

Bell previously told Tyfone he believes the current economic and operating environment will lead to even more M&A in 2025.

But the Independent Community Bankers of America argues that many credit unions have strayed from their founding mission, and some now operate in ways indistinguishable from banks – including by buying banks.

“These transactions, which reached an all-time high in 2024, undermine the competitive landscape and deprive communities of the high-touch, localized service for which community banks are known,” said former ICBA Chairman Brad Bolton.

Prior to 2024, the most credit union-buying-bank deals ever announced in a year was 16 in 2022.

There were 11 such deals announced in 2023.

For Frontwave, the deal brings enhanced business banking opportunities, while Community Valley Bank gains expanded products and services, specifically a full suite of consumer banking products, the companies said.

“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 in the release.

The companies did not say if Edney would remain with the combined organization.

Community Valley Bank was founded in 2007 and operates branches in El Centro, Brawley, Indio, Julian and Borrego Springs. Frontwave was established in 1952 and has 13 branches in San Diego, Riverside and San Bernardino counties.

Frontwave Credit Union has 128,000 members and earned roughly $5.2 million through the third quarter of 2024, an 11% increase compared to a year earlier, according to call report data from the National Credit Union Administration.

Community Valley Bank, the banking subsidiary of CMUV Bancorp, had net income of $4.2 million in the last four quarters, according to S&P Global Market Intelligence data.

“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.”

 – Bill Birnie
President and CEO
Frontwave Credit Union