Dive Brief:

• Oceanside, California-based Frontwave Credit Union has agreed to buy El Centro-based Community Valley Bank in an all-cash transaction valued at $56.4 million, the companies announced Wednesday.
• After the deal, the combined entity will have more than $1.7 billion in assets and 18 locations as Frontwave expands its footprint in San Diego and Riverside counties and enters Imperial County.
• The transaction, expected to close in the second half of 2025, has been approved by the boards of both institutions but awaits regulatory approvals and the green light from shareholders of CMUV Bancorp, Community Valley’s parent company.

Dive Insight:

This is the first proposed bank acquisition by a credit union announced in 2025. Last year’s record of 22 proposed whole-bank deals surpassed the previous record of 16 set in 2022.

Adding Community Valley will give Frontwave an extra $315.8 million in assets, $258.4 million in loans, $276.3 million in deposits and $36.6 million in equity, according to Wednesday’s release. Community Valley operates five branches in El Centro, Brawley, Indio, Julian and Borrego Springs.

“We’re excited to welcome Community Valley Bank customers as Frontwave Members and its employees to our Frontwave Dream Maker team,” Frontwave CEO Bill Birnie said in a statement. “We believe this is a partnership of like-minded institutions. We saw early on that Community Valley Bank exhibits the same values in the low desert that has made us the best bank in the high desert in the Morongo Basin for so long. It’s a perfect combination.”

The $1.4 billion-asset credit union does not plan to let go of employees or executives at Community Valley or shutter any of the bank’s branches, according to Todd Kern, the institution’s chief experience officer. 

“No one will lose their job because of this partnership,” Kern told Banking Dive in an email. “We believe that our people are our number one asset and what makes Frontwave special for our membership. CVB provides exceptional service for their customers and the communities they serve.”

CMUV Bancorp and CVB plan to dissolve after the transaction is complete. Shareholders are expected to receive roughly $25 per share upon liquidation, based on CVB's outstanding shares as of Tuesday, after accounting for holding company debt, tax liabilities and other obligations. Frontwave will cover substantially all of Community Valley’s estimated federal tax liabilities associated with the asset sale as part of the purchase price. 

“Frontwave has demonstrated its commitment to community banking, and I am enthusiastic about the opportunity we have to partner with Frontwave,” Jon Edney, CEO of Community Valley, said in a statement Wednesday.

Bank-credit union deals have long irked community banking trade groups that argue credit unions can offer a higher purchase price for banks because they aren’t required to pay taxes. 

However, Frontwave’s board touted mergers and acquisitions as a key element in the credit union’s growth strategy. 

“We believe that quality growth and diversification is essential to continued success in our industry, and we intend to achieve it both organically and through mergers or acquisitions,” Birnie said.

Michael Bell, a partner at law firm Honigman, said he thinks bank-credit union deals will continue at the same pace in 2025 as they did last year. However, he emphasized such tie-ups “will remain the sharp minority to overall M&A deals.”