Merger negotiations between a New York credit union and a bank could potentially set 2024 as a new high watermark for M&A activity in the financial sector.
In a significant move, ESL Federal Credit Union, based in Rochester, New York, has announced its acquisition of Generations Bancorp, a Seneca Falls-based bank. This all-cash deal, valued at $26.2 million, marks a new milestone in the financial sector.
Upon closing the deal, expected in the second or third quarter of 2025, the Generations name will be retired, and the branches will carry the ESL Federal Credit Union name. The acquisition aims to expand ESL's presence in Seneca, Cayuga, and Orleans counties and grow its footprint in Ontario County.
The deal will boost ESL Federal Credit Union's assets to approximately $9.6 billion, increasing its branch count to more than 30 full-service branches. Generations' shareholders are estimated to receive between $18 and $20 in cash for every share of Generations Bancorp common stock.
The synergy created by combining these two companies will assure that customers, employees, and communities have expanded financial services and membership benefits going forward, according to Angela Krezmer, CEO of Generations Bank. Consumers, according to Michael Bell, a partner at the law firm Honigman, want a full product suite, robust fraud protection, and digital capabilities.
The acquisition awaits approvals from Generations Bancorp shareholders and regulatory approvals. If the deal falls through, Generations Bancorp must pay ESL Federal Credit Union $1.64 million, according to an SEC filing on Monday.
This acquisition is part of a growing trend in the financial sector. In 2024, credit unions completed a record number of 22 whole-bank acquisitions, a significant increase compared to prior years. This trend has continued, with 7 whole-bank acquisitions announced so far in 2025, and more deals are expected, which could approach or break the previous year's record.
The Independent Community Bankers of America have expressed concerns about this uptick in credit union-bank tie-ups, arguing that credit unions' tax-exempt status allows them to offer higher purchase prices than banks. Michael Bell expects the record pace of credit union-bank tie-ups to continue, but changing consumer behavior has affected mergers and acquisitions in the financial sector.
ESL Federal Credit Union, founded in 1920, has over 429,000 members and $9.2 billion in assets. Upon closing, Generations Bank will liquidate, and its parent company, Generations Bancorp, will distribute its assets to its shareholders.
The transaction between these two Upstate New York institutions is a significant step forward in the financial sector, highlighting an accelerating trend that has strategic importance for these institutions in achieving growth and scale.
The acquisition of Generations Bancorp by ESL Federal Credit Union will expand the latter's operations into the banking-and-insurance sector, as the Generations name will be retired, and the branches will carry the ESL Federal Credit Union name. This business move is part of a growing trend in the industry, with credit unions such as ESL Federal Credit Union increasingly engaging in whole-bank acquisitions to boost their assets and branch count, often in the finance and banking-and-insurance sectors.
