Empeople Credit Union, the sixth-largest credit union in Illinois by assets, has announced its first-ever bank acquisition, agreeing to purchase Lomira, Wisconsin-based TSB Bank for an undisclosed sum. The deal, expected to close in the fourth quarter of 2024, will create a combined institution with approximately $2.2 billion in assets.
Expanding Reach and Offerings
This acquisition signifies a significant milestone for Empeople, as it extends its geographical footprint into Wisconsin and broadens its range of business and commercial services. Following the completion, TSB Bank will operate as “TSB Financial, a division of Empeople Credit Union,” ensuring continuity for existing customers and employees.
Mutual Benefits
“The communities we serve will continue to experience a customer-focused approach from familiar individuals in existing locations,” said Thomas O’Connor, CEO of TSB Bank. “This partnership provides economies of scale for our employees and customer base, while providing liquidity for our shareholders.”
Credit Union-Bank Deal Landscape
Empeople’s move reflects a growing trend of credit union-bank transactions. While it marks the fifth whole-bank acquisition by a credit union this year, it falls short of the record 16 seen in 2022. Experts like Jeff Cardone, partner at Luse Gorman, predict this pace to continue due to converging business strategies. Credit unions gain geographic expansion and commercial lending capabilities, while banks benefit from economies of scale and access to new sources of liquidity.
Strengthening Presence in the Midwest
This deal joins two prominent Midwestern institutions. TSB Bank boasts a long history in the region, with $182 million in assets and three branches. Empeople, formed in 2021 through the merger of two credit unions, brings a strong financial position and existing members in nearby areas.
“The expertise of the TSB Bank staff and management will allow us to expand opportunities for our members who own and operate small businesses,” said Kurt Lewin, CEO of Empeople Credit Union.
Industry Implications
Bank-credit union deals often draw scrutiny from organizations like the Independent Community Bankers of America, which expresses concerns about credit unions’ tax-exempt status potentially giving them an unfair advantage. Regardless, this trend highlights the dynamic landscape of the financial services industry.
Financial Performance
While Empeople’s net income decreased slightly in 2023 compared to the previous year, TSB Bank experienced modest growth. The combined entity is expected to achieve continued success and contribute to the evolving financial landscape.
Key Takeaways
- Empeople Credit Union expands into Wisconsin with the acquisition of TSB Bank.
- The deal broadens Empeople’s service offerings and strengthens its presence in the Midwest.
- This transaction reflects a growing trend of credit union-bank partnerships.
- The impact on the industry and potential challenges remains to be seen.
