Credit unions target Florida banks near and far for acquisition | Business Observer
We all know how much Michigan locals love to vacation along Florida’s Gulf Coast, but it turns out that Great Lakes State credit unions have a soft spot for Florida too, in especially our banks.
In 2017, Lake Michigan Credit Union acquired Naples-based Encore Bank, resulting in a financial institution with $5.6 billion in assets, over $9 billion in serviced mortgages, 10 branches in Florida and more than 40 branches in Michigan. Then, in June 2021, LMCU continued its foray into Florida with the acquisition of Pilot Bancshares, parent company of Pilot Bank, which has branches in Tampa, St. Petersburg and Lakeland, and National Aircraft Finance Co.
Less than a year later, Tampa-based First Citrus Bank announced that it had agreed to merge with DFCU Financial, a credit union headquartered in Detroit suburb Dearborn. Ford Motor Co. employees founded DFCU decades ago.
“We are expanding into Florida to complement our business with a higher growth market while providing additional access to our Michigan members who frequently spend time there,” writes DFCU President and CEO Ryan Goldberg. , in an email to Coffee Talk. “This acquisition brings deep expertise in commercial banking to the attractive Tampa Bay area. Additionally, First Citrus customers will be able to use DFCU Financial’s retail solutions in mortgage banking, consumer lending and investment services.
First Citrus Bank President and CEO Jack Barrett in a press release called the deal a “win” for shareholders, partners and customers. “DFCU’s Midwestern values align well with ours,” he says. Barrett will remain with the combined company as President of DFCU Financial’s Florida Market.
Michigan credit union executives such as Goldberg have obviously been paying attention to what has been happening in Florida’s banking industry in recent years, namely rampant consolidation. Take Pinellas County, for example. Until recently, it had several locally owned community banks: C1 Bank, BayFirst (formerly known as First Home Bank) and Freedom Bank in St. Petersburg, as well as USAmeriBank in Clearwater.
Today, only BayFirst remains.
“Credit unions buy banks to enter new markets, diversify their balance sheets and income statements, as well as add expertise in areas such as commercial banking,” Goldberg writes.
For their part, community banks, as Barrett suggests, might see credit unions as better suited to their organizational mission, values and culture. On the financial side of the equation, credit unions, by charter, are not pressured to deliver high returns to shareholders — an attribute that smaller independent banks might find attractive, especially if the alternative is swallowed up by a national or regional super-bank, which could run the risk of alienating customers. (Credit unions, of course, don’t have to pay taxes either, much to the chagrin of many bankers.)
“You might not get our level of customer service at a bank,” says David Oak, chief marketing officer at Dunedin-based Achieva Credit Union, which lit the fuse for the trend in 2015 when it acquired , for $23.2 million, Punta Gorda-based Calusa. Bank, “and people are looking for that these days.”
Kevin Jones, the now-retired former CEO of MidFlorida Credit Union, sums it up best: “Credit unions are becoming the new community banks,” he told the Business Observer in 2019, which was a banner year for credit unions buying banks.