- Key insight: Two small but profitable community banks opted to sell themselves to larger credit unions.
- Expert quote: “The deal flow I see on my desk, the conversations I’m involved in [indicate] 2026 will be the same or better” than 2025 in terms of credit union-bank deal flow, attorney Michael Bell said.
- Supporting data: Neither of the acquiring credit unions disclosed the amount they agreed to pay to the sellers.
While it’s unlikely the number of bank acquisitions by credit unions will equal the record 22 announced in 2024, the trend appears to be heating up.
On Monday, the $4.4 billion-asset GECU Credit Union in El Paso, Texas, struck a deal to acquire the $184.1 million-asset Bank of the Southwest in Roswell, New Mexico. On Tuesday, the $2.9 billion-asset, Jacksonville-based Community First Credit Union of Florida said it would enter the South Georgia marketplace by acquiring the $331 million-asset First Southern Bank in Waycross.
The disclosure of back-to-back deals, ending what had appeared to be a
Currently, the entire credit union industry — regardless of asset size — enjoys an exemption from federal income taxes.
“With large tax-exempt credit unions announcing two acquisitions of Main Street community banks in as many days following last year’s record number of deals, ICBA and the nation’s community bankers continue our call for policymakers to address the harmful impact these deals have on local communities,” Romero Rainey said in a press release.
Michael Bell, who leads the financial institutions practice at the Honigman law firm in Kalamazoo, Michigan, told American Banker he believed credit unions will continue to acquire banks. But Bell, who served as counsel for Community First, said such transactions would “remain the sharp, sharp minority of all deals” involving banks.
At the same time, Bell said he expected at least one more credit union to announce a bank purchase in 2025, and he predicted credit union-bank merger activity would remain robust in 2026.
“The deal flow I see on my desk, the conversations I’m involved in [indicate] 2026 will be the same or better,” Bell said.
According to GECU, acquiring Bank of the Southwest would create a merged institution with 440,000 members and $4.7 billion in assets.
“We have a vision of expanding our positive impact to help even more people and families on their financial journey and this acquisition brings us closer to this mission,” GECU President and CEO Gayle Long said Monday in a press release.
The 35-year-old Bank of the Southwest, which operates 11 branches in New Mexico, reported net income totaling $2 million through the first six months of 2025 and $4.2 million for all of 2024. GECU’s profit through the first nine months of 2025 totaled $46.2 million, according to the National Credit Administration.
Meanwhile, Community First said Tuesday in a press release that the acquisition of First Southern would strengthen its commercial lending capabilities, along with widening its footprint.
“While we love the growth opportunities that come with the transaction, this acquisition is founded on a unified vision between Community First and First Southern Bank,” Community First CEO Sam Inman Tuesday in a press release. “Both institutions emphasize a community-oriented and relationship-based approach, maintaining a culture that respects individuals and prioritizes service excellence.”
Community First would have 31 branches and assets totaling $3.3 billion after acquiring First Southern.
The 115-year-old First Southern reported net income totaling $1.5 million through June 30. Community First’s profit through Sept. 30 totaled $21.4 million.
Terms in both deals were undisclosed.