In a groundbreaking development, OneAZ Credit Union, a $3.3 billion-asset institution based in Phoenix, has announced its acquisition of the $600 million-asset 1st Bank Yuma, marking the 17th instance in 2024 where a bank has agreed to sell to a credit union. This surpasses the previous record of 16 credit union-bank deals set in 2022. Financial details of this all-cash transaction remain undisclosed.
This acquisition comes in the wake of a notable trend in the financial sector, with recent deals such as ESL Federal Credit Union’s agreement to acquire Generations Bank for $401 million in September 2024. Despite the challenges, including 11 credit union-bank deals announced in 2023, the momentum continues.
According to attorney Jeff Cardone from Luse Gorman, who advised OneAZ on the transaction, “With the recent rate cut by the Federal Reserve, we anticipate that the number of credit union/bank transactions will continue at its current pace through the end of 2024 and into 2025.”
Once the acquisition is finalized, OneAZ will boast more than $4 billion in assets and will serve over 220,000 members across Arizona. The deal will also incorporate 1st Bank Yuma’s five branches located in Yuma, San Luis, and Nogales, significantly expanding OneAZ’s footprint in southern Arizona.
Brandon Michaels, President and CEO of OneAZ Credit Union, stated, “OneAZ is taking a bold step toward fulfilling our commitment to driving positive change across Arizona. This partnership expands our reach into the rapidly growing markets of Yuma and Santa Cruz counties, where we know we can have a positive impact on the local economy to ignite even more growth and prosperity for those communities.”
Regulatory approval is expected by mid-2025, with full integration anticipated by 2026. Wayne Gale, President and CEO of Western Arizona Bancorporation and CEO of 1st Bank Yuma, expressed optimism about the deal, saying, “This strategic transaction enables us to offer our customers a wider array of products and services. We believe that this partnership is a good fit not only for our customers but also for our dedicated employees, and the communities we proudly serve.”
OneAZ Credit Union reported approximately $15 million in earnings in the first half of 2024, representing a 28% increase from the previous year. This marks the credit union’s first bank acquisition, but it has not come without controversy. The Independent Community Bankers of America (ICBA) has voiced concerns, citing a recent poll revealing that 61% of U.S. adults believe Congress should investigate credit union acquisitions of banks due to the tax and regulatory exemptions credit unions enjoy.
Rebeca Romero Rainey, ICBA President and CEO, reiterated the organization’s call for Congress to consider an “exit fee” on credit union acquisitions of tax-paying banks to recoup lost tax revenue.
Brandon Michaels emphasized the commitment to community, stating, “1st Bank Yuma has a proud legacy of community investment in southern Arizona, and we’re excited to build on their incredible work. Together, we’ll drive economic growth and opportunity, ensuring that everyone in southern Arizona has the chance to thrive and dream.”
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