HAPO Community Credit Union will acquire Community First Bank, a five-branch bank based in Kennewick, Washington, according to a joint announcement Tuesday.

The deal’s announcement breaks the record made just last week by OneAZ Credit Union and 1st Bank Yuma. With nearly three months left in the year, 2024 has brought 18 credit union-whole bank deal announcements, along with three CU-partial bank deals. The prior record, 16 whole-bank deals, occurred in 2022.

“This acquisition will enhance HAPO’s capacity to support local economic growth and address the financial needs of residents and businesses more effectively,” HAPO CEO Scott Mitchell said in a prepared statement.

The deal will create a combined institution with $2.9 billion in assets, $2.5 billion in deposits, $2.2 billion in loans and 25 branches across Washington and Oregon.

“This partnership allows us to elevate the services we provide while staying true to our core values of transparency, trust, and a client-first approach,” said Community First CEO Eric Pearson in a prepared statement. “Together, we are creating a stronger future, delivering unmatched financial solutions, more opportunities for our employees, and deepening our commitment to the communities we serve.”

Of the 18 CU-whole bank deals on the table this year and the three CU-partial bank deals, six involve a Washington state institution.

Spokane Teachers Credit Union said it would acquire Community Bank, a 10-branch bank based in Joseph, Oregon, in August. Richland-based Gesa Credit Union announced its plans to acquire Centralia-based Security State Bank in May; and Lakewood-based Harborstone Credit Union said it would acquire Burlington-based SaviBank in March.

Also in March, Tacoma-based Sound Credit Union said it would acquire Olympia-based Washington Business Bank. And Anchorage, Alaska-based Global Federal Credit Union agreed to acquire Renton-based First Financial Northwest Bank in January.

When asked in August about a potential reason for the regional cluster, Honigman attorney Michael Bell, who has advised several institutions on mergers and acquisitions including the HAPO-Community First deal, said Washington “is like other states (Florida, Illinois, etc…) that is home to a good number of great community financial institutions.”

“This just makes it ripe in the sense that more buyers and sellers exist there,” he said at the time, adding that he expected more deals to be announced in the Pacific Northwest and expected “record levels of activity” in 2024.

The Independent Community Bankers of America, however, wants policymakers to push back on such deals, arguing that credit unions’ tax-exempt status allows them to offer higher purchase prices than banks.

“The [Federal Deposit Insurance Corp.] recently approved a new statement of policy on bank mergers that for the first time explicitly states that additional scrutiny may be needed for deals involving tax-exempt credit unions — as advocated by ICBA,” the trade association’s CEO Rebeca Romero Rainey said in a prepared statement.

“[I]t is past time for policymakers to do something about this increasingly concerning trend. ICBA and community bankers continue our calls for Congress to hold hearings and to consider an ‘exit fee’ on credit union acquisitions of tax-paying banks to capture lost tax revenue resulting from these deals,” she said.

According to an ICBA poll conducted by Morning Consult, 61% of U.S. adults think Congress should investigate whether credit unions’ tax and regulatory exemptions should preclude them from snapping up banks.

The HAPO-Community First transaction is expected to close in the third quarter of 2025, subject to regulatory approvals, closing conditions and Community First shareholder approval.

As part of the deal, HFG Trust, a wealth management subsidiary of Community First Bank, will be restructured as an independent entity. Current management and staff will remain as is, according to the announcement.

HAPO will enter a strategic partnership with HFG Trust, giving members access to HFG Trust’s wealth management and trust offerings.