22 Bank Acquisitions in 2024 Expand Footprints but Hurdles Grow

In 2024, credit unions didn’t just merge with each other – they went on an unprecedented buying spree of community banks.

Twenty-two bank acquisition deals were announced by credit unions during the year, the most ever in a single year and double the pace seen in 2023. These transactions, enabled by credit unions’ strong capital and appetite for growth, allow CUs to expand into new markets, add commercial lending business, and acquire experienced staff. For example, Global Credit Union in Washington struck a deal to buy a $1.5 billion-asset bank, and Texas Dow Employees Credit Union agreed to purchase a $1.3 billion bank – the first time banks over $1 billion in assets were targets of CU acquisitions.

Such bold moves underscore that credit unions see buying banks as a strategic path to scale up services and membership. However, regulators and community bankers have taken notice, leading to increased scrutiny and longer approval times for these deals. In a few cases, deals fell through under regulatory pressure – for instance, an Atlanta credit union’s pending purchase of a bank was withdrawn after examiners raised concerns about field-of-membership and compliance plans. From a collections perspective, bank acquisitions can bring in new loan types (like big commercial loans or mortgages) and potentially higher delinquencies if not managed well.

Due diligence on the acquired loan portfolio’s quality is critical. Collections managers should be part of the integration team, ready to apply the credit union’s member-centric collections approach to the acquired accounts.

Takeaway: Credit unions’ push to buy banks hit a record high in 2024, signaling growth ambitions – but it comes with regulatory strings attached. As these hybrid institutions emerge, maintaining strong risk management and collections practices across the expanded entity will be key to making the deals pay off.