Dive Brief:

• Dothan, Alabama-based Five Star Credit Union has agreed to buy Macon, Georgia-based OneSouth Bank in an all-cash deal, Olsen Palmer, the investment bank advising the deal, announced Monday.
• The deal will give Five Star four added locations — pushing its footprint to 23 locations across lower Alabama and middle Georgia, according to the announcement. Five Star will count nearly $1 billion in assets after the transaction is complete in the second quarter of 2024: The credit union now has $773.2 million in assets; OneSouth, by contrast, has $212.2 million.
• Financial terms of the deal were not disclosed.

Dive Insight:

The deal for OneSouth would mark Five Star’s third purchase of a Georgia-based bank in the past decade. It bought Flint River National Bank in 2014 and Farmers State Bank in 2015.

It’s also the sixth acquisition of a bank by a credit union in 2023. That’s considerably less than the 10 such tie-ups that had been announced by this time last year.

Olsen Palmer, for its part, is seeing “the start of a resurgence of bank M&A activity and discussions as is illustrated by the increased deal count for the month of August, the highest so far in 2023,” Christopher Olsen, the firm’s managing director, told Banking Dive.

Meanwhile, Michael Bell, an attorney at Honigman, told Banking Dive via email that some delays were due to general economic factors.

“The [Southeast] has always been an active marketplace. The SE (Alabama, Georgia and Florida) all have a large amount of strong small banks,” he said, adding that he expects the year to end strong, with a couple more deals to be announced in the next week or so.

“I am seeing things heating up,” Bell said.

That prospect likely would concern trade groups like the Independent Community Bankers of America, which argues that credit unions’ tax exempt status allows them to offer a higher buying price and helps them grow more freely than banks.

“Five Star Credit Union and OneSouth Bank have over 140 years of combined service to members and customers in the southern parts of Alabama and Georgia,” Bob Steensma, Five Star’s CEO, said in a statement emailed to Banking Dive. “We share similar values, and our partnership will reinforce the foundation for an extraordinary community financial institution that puts our members, employees and communities first.”

The acquisition will allow OneSouth’s customers to access expanded products and solutions, Kim Davis Wilson, OneSouth’s CEO, said in a statement.

“OneSouth Bank and Five Star share many philosophies that will enable this agreement to be a win for all parties involved,” Davis Wilson said. “It was also extremely important for us to partner with an organization that shares our commitment to supporting the communities we serve, and Five Star certainly has that reputation across its footprint.”

Last year ended with a record-tying 16 bank acquisitions announced by credit unions.

Monday’s deal comes less than a month after Lakewood, Washington-based Harborstone Credit Union agreed to buy Seattle-based First Sound Bank.