Phoenix Arizona
A.E.A. Federal Credit Union in Yuma, Arizona, has agreed to buy West Valley National Bank in Goodyear, Arizona. The deal would give the credit union a presence in Phoenix and Las Vegas.

Ivan Paunovic/Dreamframer –

West Valley National Bank in Goodyear, Arizona, agreed to sell to a competing credit union. The deal continues a steady trend of small community banks joining forces with credit unions that are seeking scale and geographic diversity. 

The $350 million-asset A.E.A. Federal Credit Union in Yuma, Arizona, said in a press release it would buy the subsidiary of West Valley Bancorp in a cash deal expected to close in the second quarter of 2024. Financial terms were not disclosed.

The combined institution would have about $456 million in assets and seven branches in Arizona and one branch in Las Vegas, according to a news release. West Valley operates three branches in the Phoenix area and one in Nevada’s largest city, providing A.E.A. FCU entrance into the two major Southwestern markets.

Adele Sandberg, president and CEO of A.E.A. FCU, noted in the Nov. 1 release that the credit union is a certified community development financial institution and, as such, has a mission to deliver banking products to underserved markets.

“By expanding our footprint eastward … we can do so more expediently,” Sandberg said. Yuma, where A.E.A. FCU is based, is southwest of Phoenix.

Certified by the U.S. Treasury Department to do a portion of their business in low-income areas, CDFIs have existed since the 1990s but have become more relevant in recent years as community leaders increasingly advocate for more financial services on behalf of underserved people and neighborhoods in major cities such as Phoenix and Las Vegas. CDFIs are supported by federal resources.

The deal announcement also marked the 11th deal this year where a credit union announced plans to buy a bank, according to S&P Global Market Intelligence data. It was the first announced in Arizona in 2023. Excluding terminated transactions, there were a record-setting 14 such deals last year.

The pace of deals involving credit unions buying banks proved modest through much of 2023, but it accelerated in the third quarter after five such transactions were announced in late August alone.

Overall merger-and-acquisition activity involving banks buying other banks followed a similar trajectory this year. Through the first nine months of 2023, 79 banks announced plans to sell. That was down from 122 in the same period last year, according to S&P Global data. However, there were 34 deals announced in the third quarter, up from 20 in the first quarter and 25 in the second quarter.

Jonathan Froelich, a partner and deal advisor at KPMG, said fears of high interest rates tilting the U.S. economy into a recession had kept bank buyers on the sidelines much of this year. However, he said in a report, “an upturn may be taking shape” as “client conversations indicate that companies are more actively considering acquisitions and adding to their dealmaking capabilities.”

Froelich said this developed as the economy proved resilient in the second half of this year. Gross domestic product expanded at a 4.9% seasonally adjusted annual rate in the third quarter, bolstered by strong job growth and consumer spending.

“We believe that the economy is likely headed for a soft landing rather than a recession,” Froelich said. Bank M&A activity “should start to revive as this outlook becomes the new consensus.”


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