Florida credit union to acquire third bank in five years

MidFlorida Credit Union announced Tuesday it has struck a deal to buy Prime Meridian Bank, marking the credit union’s third bank acquisition in five years.

The purchase of Tallahassee-based Prime Meridian and its holding company, slated to close in 2026, will expand MidFlorida’s footprint in the state’s panhandle. The deal requires regulatory and shareholder approval, and it faces the ongoing bank industry pushback against such marriages.

MidFlorida CEO Steve Mosely said the move is designed to expand the Lakeland, Florida-based company’s consumer and business banking services in the panhandle region.

“As Florida’s community credit union we are already serving the panhandle in a lending capacity with mortgage, auto and commercial business loans,” Moseley said in a prepared statement. 

The addition of Prime Meridian will create a $9.5 billion-asset institution with more than 1,500 employees and 66 branches, the companies said. Financial terms of the deal weren’t announced.

Sammie Dixon, Prime Meridian’s president and CEO, said in a prepared statement Tuesday that all of the $975 million-asset company’s employees will be retained by MidFlorida, and “the expanded resources available to our clients are huge.”

“We recognized the strength in being able to adapt to change,” Dixon said. “It is fitting we now find ourselves in a position to bring physical locations to MidFlorida’s operations.”

Chris David, chief operations officer at MidFlorida, said that the two companies believe that branches, “coupled with” digital operations, are still an important part of banking. 

The merger agreement was unanimously approved by each of the companies’ board of directors. Prime Meridian shareholders will receive $58.50 for each share owned once the deal closes.

Despite a record announcement of 22 bank-credit union deals in 2024, getting such transactions over the finish line has proven somewhat complicated. Many transactions have faced extended regulatory reviews and scrutiny from banking groups, which argue that credit unions’ tax-exempt status is an unfair advantage.

On Tuesday, in the face of the MidFlorida-Prime Meridian deal, the Independent Community Bankers of America again called for policymaker action to curb the purchase of banks by credit unions. The ICBA specifically pointed to the federal tax exemption for credit unions with more than $1 billion in assets as an area ripe for reform.

“These institutions have outstripped their public mission and tax-exempt purpose and are now leveraging their tax exemption to purchase tax-paying community banks,” said ICBA CEO Rebeca Romero Rainey in a letter to Congress earlier this year. “The pace of these acquisitions in recent years is driving the consolidation of financial services across all markets, to the harm of consumers and small businesses.”

The Florida institutions’ combination marks the fifth credit-union-bank deal announcement this year, according to American Banker’s tally.

Earlier this month, Marion and Polk Schools Credit Union in Oregon announced plans to buy Lewis & Clark Bank. In March, NuMark Credit Union in Illinois said it would buy Lemont National Bank, near Chicago, in an all-cash deal, and Legacy Federal Credit Union in Alabama said it had agreed to purchase First National Bank of Cullman. Back in January, Frontwave Credit Union in suburban San Diego agreed to buy Community Valley Bank.