Panama City, Fla.-based Innovations Financial CU agreed to acquire fellow Panama City-based First National Bank Northwest Florida in the third credit union-bank deal in the past two days.

The deal has been unanimously approved by the boards of both institutions but remains subject to regulatory approvals. Financial terms of the transaction were not disclosed. The deal will push Innovations Financial CU's total assets above half a billion, as the credit union had $399.8 million in assets at June 30 while First National Bank Northwest Florida had $169.2 million in assets, according to S&P Global Market Intelligence data.

S&P Global Market Intelligence valuations for bank and thrift targets in the Southeast region between Aug. 29, 2022, and Aug. 29, 2023, averaged 158.73% of book and 170.98% of tangible book and had a median of 14.25x last-12-months earnings, on an aggregate basis.

In a press release, the credit union described the transaction as a "strategic move" to bolster its presence in Panama City, where Innovations Financial CU will now have eight branches with the addition of the bank's two current branches.

With the deal, Innovations Financial CU will expand in Bay County, Fla., by two branches to be ranked fourth, with a 7.82% share of about $6.97 billion in total market deposits, according to Market Intelligence data.

The deal marks Innovations Financial CU's first bank buy, but it is not First National Bank Northwest Florida's first time pursuing a sale to a credit union. The bank was set to be acquired by Harvesters CU in a deal announced in August 2022, but that transaction was later terminated, S&P Global Market Intelligence exclusively reported.

Eight credit union-bank deals have been announced so far this year, with three of those coming this week. Four deals have been announced in August alone.

"As you can see in the past [few] days, the pace has picked up. I expect the pace to remain elevated as we close out the year," said Michael Bell, partner and co-leader of the financial institutions practice at Honigman LLP, who advised Innovations Financial CU on this deal. "There is a lot of pent of demand on the buy and sell sides in this market and it's just starting to break loose."

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