EXECUTIVE VICE PRESIDENT’S MESSAGE CREDIT UNIONS BUYING BANKS A Closer Look JOHN W. ANDERSON Executive Vice President With MARK ANDERSON Legal and Legislative Assistant New Mexico Bankers Association Credit unions (CUs) acquiring banks has become a hot topic across the financial industry on both a national and statewide level, including in New Mexico, and for good reason. The past year has seen an unprecedented increase in bank acquisitions by CUs, closing in on 2022’s record number of 16 transactions just halfway through 2024. Not only has 2024 seen a marked increase in CUs acquiring banks, but the banks being purchased are larger. In 2023, the largest bank involved in a credit union acquisition was Western Heritage Bank here in New Mexico. It was valued at $338 million in assets and was purchased by Nusenda Credit Union. In 2024, however, several purchased banks exceeded Western Heritage Bank in assets, with First Financial Bank, purchased by Alaska-based Global Federal Credit Union, counting the most in assets at $1.5 billion. Additionally, in 2024, the total bank assets acquired by CUs stood at $7.21 billion as of June, surpassing the annual record of $5.15 billion set in 2022. Following the Heritage acquisition, U.S. Eagle Credit Union announced in August 2024 that it had entered into a definitive agreement to acquire Southwest Capital Bank. The acquisition is to be completed in the second quarter of 2025. U.S. Eagle indicated that the acquisition would allow it to tap into Southwest Capital’s knowledge of the Las Vegas market, including Mora and Pecos, and leverage the bank’s expertise in business and cannabis banking deposit services and lending. U.S. Eagle, founded in 1985, has $1.5 billion in assets, with approximately 95,000 members and 318 employees. Southwest Capital, founded in 1890 in Las Vegas, New Mexico, has total assets of $475 million and deposits of $434 million as of June 2024. If two of the last three years are any indication, the trend of banks being acquired by CUs is steadily increasing. However, this trend is certainly not without controversy, as opponents have articulated numerous potential issues with these acquisitions. One of the most compelling arguments against the trend is that CUs are taxed differently than banks, with CUs carrying both nonprofit and tax-free status. Many opponents of these mergers see CUs essentially acting like banks but being treated completely differently, enjoying the perks of tax-free and nonprofit status. In addition, CUs aren’t obligated to deliver profits to shareholders, nor
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