M&A Report: Local credit union announces major merger

Reflecting a national consolidation trend in the credit union industry, Jefferson Financial Federal Credit Union (“Jefferson”) and Keesler Federal Credit Union (“Keesler”) announced their plans in November to merge the two institutions.

After Biloxi-based Keesler acquires Metairie-based Jefferson, it will operate a total of 55 branch locations in the Gulf South and the United Kingdom, including 21 in Louisiana. Keesler will absorb Jefferson’s $715 million in assets to control nearly $5 billion on a combined basis, and will employ over 900 employees.

“Keesler Federal and Jefferson Financial Federal share a culture of service,” said Jefferson President & CEO Mark Rosa in a joint prepared statement. Keesler President & CEO Andrew Swoger said, “From a business perspective, it is a great fit that will strengthen both institutions and allow greater accessibility and services. It’s a win-win for our members.”

The deal must undergo approval by the National Credit Union Administration and receive the blessing of Jefferson’s members. Credit union members are defined as individuals who hold loan or deposit accounts with the institution. Members of the Boards do not expect the businesses to be fully integrated until late 2025 or early 2026.

Credit unions, which are not-for-profit financial institutions, have seen rapid consolidation in recent years, as institutions seek to benefit from economies of scale to provide expanded service offerings, upgrade technology to enable digital strategies, improve member experience, and attract younger consumers through digital channels.

M&A activity amongst credit unions is in its second upswing since 2019, with the first coming after COVID-19 suppressed activity, and the now after the failures of Silicon Valley Bank and Signature Bank likely caused wariness in the market. Nationally, the NCUA approved 145 mergers last year, with between 30-40 mergers approved each quarter. In 2024, there have already been 121 mergers through 9 months, with Q3-2024 seeing 49 mergers approved. There has also been an increase in the number of credit union mergers that include Louisiana-based entities: in 2023, 5 mergers were approved, while 2024 has had 6 approved through September (excluding announced-but-not-closed mergers like Jefferson-Keesler).

In November, two other Louisiana credit union transactions were also announced. New Orleans Firemen’s Federal Credit Union (NOFFCU) agreed to acquire Total Community Action Federal Credit Union (TCACU) in a transaction designed to improve the poor financial condition of the later. Metairie-based NOFFCU will add TCACU’s $726,354 in assets to its $270 million asset base.

Also, OnPath Federal Credit Union, headquartered in Metairie, announced an agreement to acquire Bridge City-based South Louisiana Highway Federal Credit Union, which had $6.2 million in assets at September 30, 2024. OnPath rose from Avondale Shipyards Inc. as ASI Federal Credit Union in 1961. The company merged with LaPlace-based Louisiana Federal Credit Union earlier this year to create an institution with more than $1 billion in assets.

G.F. Gay Le Breton is managing director for Chaffe & Associates Inc., responsible for the corporate finance activities of the firm. Liam Norton is a corporate finance analyst with the firm. Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC. For more information, visit http://chaffe-associates.com.