Who knew a Dunedin-based credit union could be nicknamed the Great Disrupter?
Achieva Credit Union, which once served mostly Pinellas teachers, is launching a consulting service that would help larger credit unions buy smaller community banks.
Sounds mundane but it borders on revolutionary.
In the financial world, credit unions are the Hatfields. Commercial banks are the McCoys. They compete head-on to capture consumer and some business banking services. But they are different animals, with credit unions enjoying tax benefits not available to banks. And banks provide many services beyond the expertise of many credit unions. In Washington, banks have long complained that credit unions do not pay their fair share of taxes, while credit unions argue their lower costs help small savers and modest-income families.
Now Achieva is launching the first-of-its-kind Achieva Merger Services which hopes to make a profitable business out of telling credit unions of the merits behind buying smaller commercial banks, and urging banks to consider credit unions a rich new resource of potential buyers.
Achieva knows this special financial niche better than anyone. In 2015, Achieva purchased a community bank called Calusa Bank. It was the nation's first "whole-bank" acquisition of a bank by a credit union — meaning Achieva bought all of Calusa by acquiring its stock for cash.
Is this a case of mixing dogs and cats? Not so, says former commercial banker Dennis Holthaus who as Achieva's executive vice president is now charged with getting this consulting business off the ground.
"Once the CEOs of a credit union and a prospective community bank start talking to one another and see the similarities of their culture and philosophy, any animosity quickly goes away," Holthaus suggests.
Besides, smaller community banks used to be able to rely on bigger banks to buy them up. That happens a lot less often since the past recession, which makes expansion-minded credit unions looking to make deals all the more enticing to small banks hoping to sell.
Says Holthaus: "Cash deals to bank shareholders can go a long way."