Dive Brief:
- Philadelphia-based American Heritage Credit Union has agreed to buy three southern New Jersey branches from Camp Hill, Pennsylvania-based LinkBank, the acquirer said Thursday in a press release.
- The acquisition includes roughly $105 million in deposits and $123 million in loans, the credit union said. However, the value of the transaction, expected to close during the second half of this year, was not disclosed.
- LinkBank initially acquired the three New Jersey branches as part of its 2023 purchase of Salisbury, Maryland-based Partners Bank, the credit union said.
Dive Insight:
LinkBank CEO Andrew Samuel pointed to the branch sale as an example of efficiencies the bank planned from the Partners tie-up.
“We believe this divestiture will enable us to re-allocate capital toward our core Pennsylvania markets and accelerate growth in the robust Northern Virginia and Maryland markets,” Samuel said in a statement.
The three branches, meanwhile, more than double American Heritage’s brick-and-mortar footprint in the Garden State. The credit union counts two locations in New Jersey among its 34 offices. The rest are in Pennsylvania.
“The acquisition from LinkBank underscores our commitment to serving our members with enhanced accessibility and expanded financial offerings,” American Heritage CEO Bruce Foulke said. “We are excited to expand our products and service offerings further into South Jersey and provide our new members and business partners with the same best-in-class service standards we’ve offered for over 75 years.”
The transaction also represents a growing trend this year among deals between banks and credit unions: the partial-bank acquisition. Alabama-based All-In Credit Union agreed in January to buy five branches from 22nd State Bank in the state. And Hudson Valley Credit Union in March said it would acquire eight locations from Boston-based Berkshire Bank.
Full-bank purchases by credit unions are up this year, too. Texas-based TDECU announced April 30 that it had agreed to buy Louisiana-based Sabine State Bank & Trust, marking the eighth full-bank acquisition by a credit union in the first four months of 2024.
If credit union-bank tie-ups continue at that pace, the year would see 24 such deals — a 50% increase over the record 16 deals announced in 2022 (though only 14 of those transactions closed). Credit unions announced 11 deals to buy banks in 2023.
“As you can see, the pace of branch transaction has materially increased,” Michael Bell, chair of the financial institutions practice group at the law firm Honigman, told CUToday. “I expect this to continue for the balance of 2024 based on micro and macro-economic factors. The economy is driving sellers to get more efficient and deliver earnings to their shareholders.”
The Independent Community Bankers of America has long opposed credit unions buying banks. In a February post on X, formerly Twitter, the trade group said 20% of bank acquisitions “are now by tax-subsidized credit unions, and each one increases the portion of the financial services industry exempt from [the Community Reinvestment Act] and taxation.”
