
Report: growing number of credit union mergers failing to close
Newly-released research from S&P Global Market Intelligence found that four tie-ups were cancelled in 2024, the most since 2021.
Five M&A deals in which a credit union would have been the acquirer failed in 2024, including one transaction involving a bank seller, a new study by S&P Global Market Intelligence found.
Atlanta Postal Credit Union’s planned acquisition of Affinity Bank was called off in December as was the proposed merger between Community Credit Union of Florida and Launch Credit Union.
Three other deals between credit unions were also nixed last year including:
- Alcose Credit Union’s merger with Saint Norbert’s Credit Union in Pittsburgh.
- Denver Community Credit Union’s tie-up with Sooper Credit Union in Colorado.
- Centra Credit Union’s combination with Hoosier Hills Credit Union in Indiana.
The S&P research found that regulatory hangups, changes in the timeline to regulatory approval, member or board member sentiment, or core mission differences were often the cause of the terminations.
“If a merger between two credit unions doesn’t come together, a lot of it is that they kick the can down the road and they didn’t ask the hard questions early from a structural standpoint,” ALM First Managing Director Brandon Ritter told S&P.
A record 22 deals involving credit unions buying banks were announced last year. Three of those deals have closed, 18 remain pending and the Atlanta Postal CU deal has been called off.
Because credit union-bank deals are a growing trend, more investment banks are now interested in advising on the deals, McQueen Financial Advisors Founder and CEO Charley McQueen told S&P.
But advisers that do not have prior experience with the intricacies of those deals may not know the specific information that regulators are looking for in order to grant approval, McQueen said.
Additionally, a trend toward larger transactions has made regulatory reviews more time-consuming, which in turn has led to more terminations, Ritter said.
The largest credit union-bank deal ever terminated was also the largest such deal ever announced. VyStar Credit Union’s planned acquisition of the $1.6 billion-asset Heritage Southeast Bancorp was called off in 2022.
The four credit union-to-credit union mergers terminated last year were the most since five were cancelled in 2021.
The largest credit union merger nixed since 2007 was United Federal Credit Union’s planned tie-up with Lake Michigan Credit Union in 2016, S&P found. The Community Credit Union of Florida-Launch CU deal was the third-largest to be called off in that timespan.