Daleville, Ala.-based All In FCU agreed to acquire Dothan, Ala.-based SunSouth Bank in the third credit union-bank deal of 2023.
Financial terms of the all-cash transaction, which is expected to close in the first quarter of 2024, were not disclosed. The deal will boost All In FCU's total assets to about $3 billion, according to the press release.
With $2.81 billion in total assets at March 31, All In FCU is the largest buyer among the three credit union-bank deals announced this year, according to S&P Global Market Intelligence data. SunSouth Bank had $114.2 million in assets as of the same date.
Market Intelligence valuations for bank and thrift targets in the Southeast region between June 1, 2022, and June 1, 2023, averaged 165.49% of book and 183.45% of tangible book and had a median of 12.98x last-12-months earnings, on an aggregate basis.
SunSouth Bank will add two branches to All In FCU's current 31 branch footprint that reaches across southern Alabama and into the Florida panhandle.
With the completion of the deal, All In FCU will expand in Houston County, Ala., by one branch to be ranked No. 13 with a 2.01% share of about $4.01 billion in total market deposits and will enter Barbour County, Ala., with one branch to be ranked sixth with a 4.66% share of roughly $490.85 million in total market deposits, according to Market Intelligence data.
The boards of both institutions have unanimously approved the deal, but it remains subject to SunSouth Bancshares Inc. shareholder approval and regulatory approvals.
Mercer Capital was financial adviser to All In FCU, while law firm Honigman LLP was legal counsel. SunSouth Bank was financially advised by Olsen Palmer LLC and legally advised by law firm Jones Walker LLP.
The announcement came amid a slow period for bank M&A in which just 32 deals involving a US-based bank have been announced, including the All In FCU-SunSouth deal. The deal is All In FCU's first bank buy.
The three credit union-bank deal announcements this year stand in stark contrast to the record 16 announcements in 2022. However, with the dearth of US bank M&A as a whole, the three credit union deals make up 9% of deal activity so far this year.
"The economic uncertainty had caused a pause in the M&A space, [and] this transaction is the first piece of evidence that the pause is ending," said Michael Bell, partner and coleader of the financial institutions practice at Honigman, who advised All In FCU on this deal. "Things are very active right now, and you should expect to hear more deals announced in the very near future."