Michigan's ELGA Credit Union to Finalize Acquisition of Florida-Based Bank
In a strategic move to expand its reach and offerings, Grand Blanc, Michigan-based ELGA Credit Union has agreed to acquire Vero Beach, Florida-based Marine Bank in an all-cash transaction. This deal, expected to close in early 2025, is part of a growing trend of credit unions acquiring banks, a trend that is reshaping the financial services industry.
ELGA, a specialist in low-income lending, is set to broaden its customer base in east central Florida with this acquisition. The deal will give ELGA seven additional locations, including five banking centers and two loan production offices. This move aligns with the strategic goals of credit unions, which are looking to expand geographically, enter new markets, gain assets, and enhance service offerings such as commercial lending.
The acquisition of banks by credit unions, particularly those that cross state lines, has been a source of frustration for banking trade groups. However, many credit unions, like ELGA, are seen as community-focused. In fact, the acquisition is likely to maintain all of Marine Bank's banking centers and jobs, and ELGA has pledged to expand Marine Bank's philanthropic efforts throughout Vero Beach and other communities within its reach.
One of the key drivers of this trend is the tax advantages that come with the acquisition. When a credit union acquires a bank, the acquired assets become part of a tax-exempt institution, reducing overall tax burdens compared to banks. This tax exemption is a major factor in such acquisitions and has sparked regulatory scrutiny and public debate over credit unions' evolving mission and tax status.
The year 2024 is on pace to shatter the record 16 such deals announced in 2022. Apart from the 12 whole-bank acquisitions by credit unions this year, three credit unions have announced their intention to buy partial bank footprints. Cross-town neighbor Dort Financial Credit Union in Grand Blanc, Michigan, completed its acquisition of West Palm Beach-based Flagler Bank in December.
Two years earlier, Grand Rapids-based Lake Michigan Credit Union bought Tampa-based Pilot Bank, demonstrating the long-term commitment of credit unions to strategic growth. The acquisition of Marine Bank by ELGA Credit Union will not only diversify ELGA's offerings to include commercial banking and treasury management, but it will also enable the credit union to achieve greater scale, a critical factor in a competitive financial landscape increasingly influenced by technology and changing consumer demands.
