Dive Brief:
- Wabash, Indiana-based Beacon Credit Union plans to acquire Mid-Southern Savings Bank of Salem, Indiana, in the fourth proposed tie-up between a bank and a credit union announced in 2024.
- Beacon will pay roughly $45 million for the bank, although the final price will be adjusted based on the bank’s equity at deal closing, the credit union said in a press release Friday.
- The deal is expected to be completed in the third or fourth quarter of 2024.
Dive Insight:
Mid-Southern, a $266 million-asset institution, would be Beacon’s first community bank acquisition and continues the credit union’s strategic expansion into southern Indiana.
“This acquisition is a win-win for everyone involved as it provides Beacon’s competitive services and products to new communities,” Beacon’s CEO, Dustin Cuttriss, said Friday.
Upon completion of the transaction, Mid-Southern CEO Alexander Babey will join the $1.5 billion-asset Beacon in a transitional consulting role.
Beacon plans to keep open all three of Mid-Southern's branches and its three loan production offices after the deal closes.
Deals involving credit unions buying banks are being struck at a torrid pace to start 2024: Four have come in year’s first 26 days.
By comparison, there were 11 credit union deals for whole banks announced last year, down from a record 16 struck in 2022.
The Beacon deal came one day after Advia Credit Union of Kalamazoo, Michigan, said it struck a deal to acquire $267 million-asset NorthSide Community Bank in Illinois.
Beyond the whole-bank deals, All In Credit Union in Daleville, Alabama, announced plans to acquire five branches from Louisville, Alabama-based 22nd State Bank.
“The activity levels I am experiencing are unprecedented,” said attorney Michael Bell of Honigman, who has advised many credit unions on bank buys. “There’s a lot happening. Barring an act of God or black swan event, I am certain that this year will break records.”
Attorney Jeff Cardone of Luse Gorman, which served as legal adviser to Catskill Hudson Bank in its deal with Hudson Valley Credit Union and to Mid-Southern Bank in the Beacon deal, said an improved interest rate environment and increased tangible book values for banks will only lead to more deals.
“We are anticipating that the pace of deals involving credit unions buying banks will continue to accelerate in 2024 and beyond, particularly for selling banks that desire cash consideration,” Cardone said.
Beacon Credit Union earned $3.2 million in the first three quarters of 2023, compared with roughly $5 million in 2022, according to call report data from American Share Insurance.
Net income for Mid-Southern Bank was $1.6 million through the first two quarters of 2023, compared with $1.9 million the year before, according to S&P Global Market Intelligence.
