Whether offering teaser rates to increase membership, opening new branch offices, or acquiring smaller rivals, our nation's credit unions are growth-driven.

In fact, 50 credit unions with 25% or more growth in assets during 2023 can be found on page 5 of this week's Jumbo Rate News.

Two of the credit unions on that list are there, at least in part, due to the purchase of a bank. Since this is becoming more common, we have also provided an update of bank-credit union combinations since we last reported on the subject (last October).

Credit Union Growth Unchained

You may have seen this, if not here it is: 5-Star California Coast CU, San Diego, CA is celebrating its 95th anniversary with a 5-month CD paying 9.5% APY. This “Celebration CD” may be opened with as little as $500 and not more than $3,000 (new money only). One certificate is allowed per social security number.

The account holder must also have an active checking account with at least one transaction per month, or may open a Money Market or CD with at least $5,000 (again, new money) or may take out a new consumer loan (exclusions apply).

If the conditions are not met and maintained during the life of the CD, the celebration will be over. The CD rate will drop to the posted 3-month CD rate (currently 0.10%) for the remainder of the term. Upon maturity, the Celebration CD will automatically transfer to the account holder’s primary savings account which is currently paying 0.05% APY.

It’s a great gimmick. We have not see a 9.5% APY in decades. It even turned our heads. But how great a deal is it, really? Let’s break it down.

$3,000 for 5 months at 9.50% APY will earn $116 over those 5 months and another $1 if left unattended for the remainder of the year in a savings account (Total = $117).

$3,000 for 12 months at 5.40% APY(the highest 1 year rate on Bauer’s consumer CD rate page) will earn $162 over the year (Total = $162).

If you are the type of person who will be on top of that maturity and transfer those funds to a better paying account after 5 months, then this may be the account for you.

The credit union is betting that the remnants of that Celebration CD will languish in the savings account long enough for it to recoup some of the interest you earned. It is a novel way to build membership, though.

Another path to membership growth is by acquisition—CU or bank. The latter has become increasingly  popular. In fact, last October we provided a list of credit unions that had completed bank purchases between January 2022 and mid-October 2023 (JRN 40:40). We also noted several others that were pending, so it’s time for an update.

On page 5 we have listed 50 federally-insured credit unions that had 24.8% asset growth (or more) during calendar 2023 (and were established prior to 2018 and have at least $1.5 million in assets). Two of those credit unions made the list by acquiring a bank.

The first took a while, but 4-Star Alabama One CU, Tuscaloosa, AL finally received approval to acquire the First Bank, Wadley, AL and that transaction was completed in December. That, combined with two credit union purchases (Sept and Oct ’23) secured a place on page 5 for the now $1.2 billion asset credit union. Alabama One CU’s asset growth during 2023 was 25.8%.

Alabama One CU is also one of many CUs on page 5 that plan on growing, at least in part, via the opening of new branches this year.

The other, 3-Star Dort Financial Credit Union, Grand Blanc, MI’s purchase of Flagler Bank, West Palm Beach, FL was also in completed in December. Dort Financial CU reported 55% asset growth.

Thirteen other pending “whole” bank acquisitions by a credit union are listed in column 2. (We omitted branch only purchases.) Other completed whole bank acquisitions since October include:

5-Star Land of Lincoln CU , Decatur, IL which completed its purchase of Nokomis SB, Nokomis, IL in November;

5-Star All In Credit Union, Daleville, AL acquired 4-Star SunSouth Bank, Dothan, AL in January; and,

The acquisition of 5-Star Western Heritage Bk, Las Cruces, NM by 5-Star NUSENDA CU, Albuquerque, NM was completed in March.

While numerous, these transactions are  still a lot less common than “same type” acquisitions (bank-bank or CU-CU).

Stars	Acquiring Credit Union Target Bank	City	ST	Total Assets ($ mils)
4-Stars	Global Credit Union	Anchorage	AK	$11,903.12
5-Stars	First Financial Northwest Bk	Renton	WA	$1,504.46
5-Stars	Five Star Credit Union	Dothan	AL	$798.52
5-Stars	OneSouth Bank	Macon	GA	$221.21
5-Stars	Wilcox County State Bank	Abbeville	GA	$169.79
4-Stars	Avenir Financial FCU (f/k/a AEA)	Yuma	AZ	$389.77
2-Stars	West Valley National Bank	Goodyear	AZ	$74.82
5-Stars	Innovations Financial C.U	Panama City	FL	$428.40
5-Stars	First Nat’l Bk Northwest FL	Panama City	FL	$172.38
4-Stars	Empeople Credit Union	Moline	IL	$1,992.51
5-Stars	TSB Bank	Lomira	WI	$181.98
5-Stars	Advia Credit Union	Kalamazoo	MI	$2,987.05
5-Stars	Northside Community Bank	Gurnee	IL	$255.46
5-Stars	Michigan State University F.C.U.	East Lansing	MI	$7,685.87
5-Stars	Algonquin State Bank	Algonquin	IL	$138.96
5-Stars	McHenry Savings Bank	McHenry	IL	$311.81
5-Stars	Hudson Valley Credit Union	Poughkeepsie	NY	$7,062.78
4-Stars	Catskill Hudson Bank	Monticello	NY	$572.28
5-Stars	Beacon Credit Union Inc.	Lynchburg	VA	$304.07
5-Stars	Mid-Southern SB	Salem	IN	$268.62
5-Stars	Harborstone Credit Union	Tacoma	WA	$1,909.29
5-Stars	First Sound Bank	Seattle	WA	$161.17
5-Stars	Sound Credit Union	Tacoma	WA	$2,910.19
5-Stars	Washington Business Bank	Olympia	WA	$104.84

Another avenue of growth for a credit union is by expanding its field of membership. We see a lot of that as well, but that is generally a much slower growth, so you won’t typically be seeing those on a list like what’s on page 5 of this week's Jumbo Rate News.