Dive Brief:
- Birmingham, Alabama-based Legacy Community Federal Credit Union has agreed to acquire in-state peer First Community Bank of Cullman in an all-cash transaction, the credit union said Tuesday.
- The financial terms of the deal were not disclosed. The company said the acquisition would help Legacy expand beyond the greater Birmingham area into Cullman County.
- The deal, which is expected to close this year, has received approvals from board members of both institutions but awaits the regulatory greenlight.
Dive Insight:
“Legacy has been committed to crafting financial solutions for the communities we serve for over seventy years,” Glenn Bryan, Legacy’s CEO, said in a statement. “Our culture emphasizes excellence, education, energy, and empowerment, and we look forward to bringing our approach to financial service to the people of Cullman County.”
The $644 million-asset Legacy counts nine branches and serves about 39,000 members in central Alabama. It plans to open two more locations this year, according to Tuesday’s press release.
The transaction will enable Legacy to offer a broader range of financial products and services to local residents and businesses, including enhanced digital banking options, competitive checking account choices and high-yield savings accounts, the company said.
First Community Bank, by comparison, had $104 million in assets, $81 million in loans, $79 million in deposits and $13 million in equity as of Dec. 31, 2024.
“After decades of service to the Cullman area, the decision was made by our Board of Directors to seek a partner that could take our service to the next level,” Billy Faulk, First Community’s CEO, said in a statement. “We were determined to find a group that held the same philosophy of business that we do, and after an extensive search, we found that in Legacy.”
Neither Legacy nor First Community could be reached for comment.
It’s the third bank-credit union deal announced this year. California-based Frontwave Credit Union agreed in January to buy in-state Community Valley Bank for $56.4 million. Last week, Illinois’ NuMark Credit Union announced it would buy in-state lender The Lemont National Bank.
The number of whole-bank acquisitions by credit unions surged in 2024, with 22 deals announced, breaking the previous record of 16 such deal announcements in 2022.
Bank-credit union deal announcements this year “will be on the same pace as last year,” Michael Bell, a partner at law firm Honigman, said last week.
Trade groups such as the Independent Community Bankers of America have long criticized these deals, saying the tax-exempt nature of credit unions allows them to offer a higher purchase price.
Last week, the ICBA introduced a new resolution that called on lawmakers to end the federal tax exemption for credit unions with $1 billion or more in assets or to establish a tax uniformity between credit unions and community banks that pay taxes.
“Eliminating the federal tax exemption for credit unions over $1 billion in assets will help ensure taxpayer dollars no longer tilt the competitive marketplace, subsidize community banking consolidation, and result in fewer choices for consumers and small businesses,” ICBA CEO Rebeca Romero Rainey said March 12.
