Dive Overview:
RichlandWashington-based Gesa Credit Union CentraliaThe banks announced in a press release Thursday that they will acquire Washington state-based Security State Bank. The deal, expected to close next year, marks the fourth time the credit union has announced it will acquire an Evergreen State-based bank in 2024. The purchase price was not disclosed, but the transaction will add 12 branches to Lewes. Thurstonin Pacific and Gray Harbor counties. Gesa’s 31 locations.
Dive Insights:
The Gesa Credit Union deal follows three other credit union-bank partnerships with Washington state ties: Anchorage, Alaska-based Global Federal Credit Union said in January it was buying Renton-based First Financial Northwest Bank; Tacoma-based Sound Credit Union announced plans in March to buy Olympia-based Washington Business Bank; and Lakewood-based Harborstone Credit Union announced days later it was acquiring Burlington-based SaviBank.
Geography aside, Security State is one of the largest banks ever acquired by a credit union, with more than $606 million in assets (by comparison, Gesa is worth $5.5 billion).
The largest bank involved in a credit union deal last year was New Mexico-based Western Heritage Bank, with $338 million in assets. But so far in 2024, five banks larger than Western Heritage have announced sales to credit unions, with First Financial Northwest being the largest.
Geoff Cardon, Ruth Gorman’s partner and legal counsel, Gesa On this deal, the credit union CEO told Banking Dive that the biggest difference driving credit union and bank deals this year is that there have been fewer bank buyers given bank stock prices, the interest rate environment and regulatory challenges, resulting in credit unions filling the void.
“Why banks are getting bigger [in 2024] “Credit unions are the only realistic buyers from a purchase accounting perspective that can pay in cash and absorb a bank’s balance sheet, and the geography of these transactions is [primarily] The Pacific Northwest and Florida have larger bank targets than other market regions such as the Midwest. [composed] There are many small community banks.”
The American Association of Independent Community Bankers has long opposed credit union bank acquisitions. In a February post on X (formerly Twitter), the trade group said that 20% of bank acquisitions “are currently made by tax-advantaged credit unions, each of which expands the financial services industry’s tax exemption.” [the Community Reinvestment Act] And taxation.”
The GESA deal marks the 10th proposed acquisition of an entire bank by a credit union this year. By comparison, 11 credit union-bank partnerships have been finalized in all of 2023. And 2024 appears on track to break the record of 16 deals announced in 2022.
Additionally, three partial credit union bank acquisitions are planned for this sector in 2024.
Don Miller Gesa’s The CEO said Thursday that the agreement will be a catalyst for the credit union to continue expanding its reach and services in the Pacific Northwest.
“both Gesa “For more than 70 years, our company and Security State Bank have shared the same values and an unwavering commitment to the communities we serve,” Miller said.
Dwayne Abar, president of Security State Bank, said: Gesa Offer your customers and employees expanded products, services, locations and benefits.
“In today’s increasingly competitive banking industry, we believe this transaction will provide immeasurable benefits to the communities, customers and employees to whom we have served so well for so many years, and we thank them for the trust they have placed in us over the years,” Abel said.
Once the transaction is complete, Security State Corp. and Security State Bank will each be dissolved and the companies will distribute their remaining assets to shareholders.
