Poughkeepsie, New York-based Hudson Valley Credit Union has agreed to buy Catskill Hudson Bank and its parent company Hudson Bancorp, the credit union announced Wednesday.
Stockholders of the community bank will receive $40.50 in cash for each share of Catskill Hudson common stock held — making the deal value roughly $28.6 million, the statement said.
The transaction will boost HVCU’s assets to $7.4 billion and increase its footprint to 32 branches across the Hudson Valley and Capital Region, while adding a commercial book of business. The merger is expected to close by the second half of 2024 after regulatory approvals, after which Catskill Hudson Bank will operate under the HVCU name and brand.
“This is an important moment in our growth story. Welcoming the Catskill Hudson customers and employees to the credit union will create a stronger institution than either of us were individually,” HVCU CEO Jonathan Roberts said in a statement. “Together, we will advance our mission by serving members in the northern counties of our current field of membership, and expand our service to include Sullivan County to the west.”
The Monticello, New York-based community bank brings with it $593 million in assets and around 7,500 customers across 14 branches and corporate offices in Sullivan, Orange, Ulster, Saratoga and Albany counties.
The move will give the lender a strong foothold in the competitive market and expand HVCU’s services in Sullivan County, Roberts said in a note to members. The credit union also aims to retain all employees of the bank, he added.
“Catskill Hudson leadership recognized that a strong financial partner like HVCU can help to ensure future financial success for both their customers and employees,” Roberts said.
Under the merger agreement, Mario L. Martinez, chairman and CEO of Catskill Hudson Bank, will serve as a senior market president.
“It was extremely important for us to partner with an organization that shares similar values, and we found that in Hudson Valley Credit Union. I am confident that HVCU will bring many benefits to our employees and customers for years to come,” Martinez said in a statement. "With Hudson Valley Credit Union's deep breadth of financial products and services, our customers will have even more opportunities to thrive with a financial partner that puts their well-being at the forefront — just as we have done for the past 30 years."
Michael Bell, attorney at Honigman, said he sees the market heating up across the country, adding that he expects to announce a deal in the upper Midwest soon.
“There is an exceptionally high level of activity right now,” Bell told Banking Dive in an email.
This is the first full bank and credit union merger announced this year. Earlier this month, Daleville, Alabama-based All In Credit Union announced the acquisition of five branches of 22nd State Bank in the state.
Though bank-credit union deals have generally been on the rise in recent years, 2023 saw a reduction in their numbers. There were 11 such deals last year, compared with 16 in 2022 — a record-setting year for bank-credit union combinations.
Trade groups like the Independent Community Bankers of America have raised concerns about deals between banks and credit unions, arguing that credit unions’ tax-exempt status allows them to offer a higher buying price than banks and helps them grow more freely.
