Louisiana credit union set to acquire domestic bank within the state
OnPath Credit Union has announced its latest acquisition, agreeing to buy Heritage Nola Bancorp and its subsidiary Heritage Bank of St. Tammany in a cash transaction worth $26 million. The deal, expected to close in the second quarter of 2026, marks the second significant acquisition for OnPath Credit Union this year, following its merger with Louisiana Federal Credit Union in 2024.
The per-share amount for Heritage Nola's shareholders ranges from $20.00 to $20.75. The transaction will see Heritage Bank liquidate and distribute its remaining assets to Heritage Nola Bancorp upon completion.
The deal between OnPath Credit Union and Heritage Nola Bancorp involves two institutions with over $1 billion in assets. This development has drawn the attention of the Independent Community Bankers of America, who have expressed concerns about acquisitions by billion-dollar, tax-exempt credit unions.
The tax-exempt status of credit unions has been a topic of debate in the financial industry. Critics argue that this status provides a perceived competitive advantage and impacts bidding prices. Banks and some state banking associations contend that credit unions’ exemption from federal income tax lowers their cost base, enabling them to bid more aggressively or offer more favourable terms during acquisitions.
However, credit unions and their trade leagues defend their tax exemption, emphasising their cooperative nature and service mission. They caution that taxing credit unions could reduce member benefits, local investments, and potentially affect the value and operations of credit unions during such transactions.
Transparency and regulatory matters also come into play, as federal credit unions classified as government instrumentalities do not file Form 990, minimising publicly available information related to executive compensation and financial details. This opacity may affect valuations and bidding fairness in credit union acquisitions.
David Crumhorn, CEO of Heritage NOLA Bancorp and Heritage Bank, stated that the partnership is a return to their roots, as both institutions are community-focused. The latest proposal for Heritage Nola comes more than a year after a proposed merger with Morgan City-based MC Bancshares fell through.
Under the terms of the deal, OnPath will reimburse Heritage Bank up to $2 million for the payout of its liquidation account and up to $1 million for Heritage Nola Bancorp's tax liabilities from the purchase and assumption transaction. This marks the ninth whole-bank credit union deal announced this year.
Heritage Nola has 1,239,680 outstanding shares of common stock. The all-cash merger, valued at $6.5 million, was announced in July 2023 and was expected to close in the fourth quarter of that year, but was subsequently pushed to 2024.
- The acquisition of Heritage Nola Bancorp by OnPath Credit Union, worth $26 million, is a significant deal in the banking-and-insurance industry, as both institutions have over $1 billion in assets, drawing attention from organizations like the Independent Community Bankers of America.
- In the financial sector, the tax-exempt status of credit unions has been a contentious issue, with critics arguing that it offers a perceived competitive advantage during business transactions, such as acquisitions, by lowering their cost base.
