Alabama credit union to buy 5 branches of community bank

Dive Brief:

Daleville, Alabama-based All In Credit Union has agreed to buy five branches of 22nd State Bank in the state, the bank announced Wednesday.
After the deal, two branches of 22nd State Bank will remain. The bank will relocate its charter to Mobile, Alabama, and operate as an independent community bank, CEO Steve Smith said in a statement.
Financial terms of the deal, expected to close by the third quarter, were not disclosed.

Dive Insight:

All In will acquire 22nd State Bank branches in Brewton, Clayton, Eufaula, Geneva and Louisville under Wednesday’s deal.

The credit union will gain roughly $145 million in deposits from the transaction and $130 million in loans, the bank said, according to figures from Oct. 31.

“We are excited to acquire these five branch locations from 22nd State Bank,” All In CEO Bobby Michael said in a statement Wednesday. “This move allows us to expand our presence in our home base of south Alabama. We look forward to welcoming those 22nd State Bank employees and customers associated with the Branches to the All In family.”

All In is not a newcomer in bank M&A. The credit union agreed to buy Dothan, Alabama-based SunSouth Bank in June. Like the 22nd State deal, the June acquisition also aimed to expand All In’s footprint across southern Alabama.

Though bank-credit union mergers and acquisitions have generally been on the rise in recent years, 2023 saw a decrease in such deals — to 11, from 16 in 2022.

The All In-22nd State deal won’t count toward that figure because it is a partial-bank acquisition.

Michael Bell, an attorney at Honigman, called the deal a natural and adjacent expansion for All In, given its geography.

“Branch deals are rare, but they happen,” Bell told Banking Dive via email. “This is a very compelling and easy ‘add-on.’”

Smith said the transaction “will more closely align 22nd State Bank’s geographic footprint with our strategy to be a community bank serving Alabama’s Gulf Coast region.

Christopher Olsen, managing partner at Olsen Palmer, said he expects credit union-bank activity levels to increase this year.

“After a somewhat tepid year for community bank M&A in 2023, we are seeing momentum building for greater M&A activity in 2024 driven by a variety of factors, including a decline in interest rates and the corresponding relief in bond valuations, a recovery in bank stock valuations, and the pursuit (on the part of acquirers) or lack of (on the part of sellers) sufficient operating scale,” Olsen told Banking Dive in an email.

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.