Credit unions kick off 2024 with record-breaking bank buys

Credit unions kicked off 2024 with a pair of record-breaking deals.

Hudson Valley CU kicked off the new year with its acquisition of Catskill Hudson Bancorp Inc. subsidiary Catskill Hudson Bank, marking the first time a New York-based bank was targeted by a credit union and the 10th-largest credit union-bank deal ever, based on target assets. But that deal was quickly overshadowed the next day when Global FCU announced its acquisition of First Financial Northwest Inc. subsidiary First Financial Northwest Bank, breaking multiple records.

With $1.53 billion in assets at Sept. 30, 2023, First Financial Northwest Bank is the largest bank targeted by a credit union ever, and the first bank with more than $1 billion in assets set to be acquired by a credit union. First Financial Northwest Bank is also the first bank with a holding company publicly traded on a major exchange to be the target in an acquisition by a credit union.

Moreover, with $11.84 billion in assets at the end of the third quarter of 2023, Global FCU is the largest credit union to strike a bank deal ever. Following the acquisition, the credit union will have more than $13.36 billion in assets, based on S&P Global Market Intelligence data as of the third quarter of 2023.

With the sheer size of the two bank targets involved in credit union deals announced so far this year, 2024 has already surpassed last year's total target assets with just two deal announcements.

Pretty price tag

Global FCU agreed to acquire substantially all assets and assume substantially all liabilities of First Financial Northwest Bank for $231.2 million in cash, subject to certain adjustments. First Financial Northwest and First Financial Northwest Bank will wind down and dissolve after the purchase and assumption transaction, and First Financial Northwest shareholders are expected to receive about $23.18 to $23.75 per share upon liquidation. In comparison, First Financial Northwest's closing price before the deal was announced was $13.68.

Investors applauded the deal, sending First Financial Northwest's stock price up 48% on the day of the announcement.

Catskill Hudson also received a hefty premium in its transaction. Hudson Valley CU will pay $40.50 for each share of the company, a 119% premium to its $18.50 closing price the day before announcement.

The Street also liked the Catskill Hudson deal, with the company's shares closing up 103% the day of announcement.

– Access the S&P Capital IQ Pro M&A summary page for US financial institutions. – Access a list of pending and completed M&A deals announced since Jan. 1, 2013. – Read more M&A news. – Please click here if you would like to participate in the 2024 US Bank Outlook Survey.

Expanding to the Empire State

Both deals mark geographic expansion for credit union-bank deals, which have been largely concentrated in the Southeast and Midwest. Catskill Hudson Bank is the first New York-based bank to be targeted by a credit union, while First Financial Northwest Bank is the third Washington-based bank to be scooped up by a credit union.