Ken McCarthy

LincolnWay Community Bank in Illinois has agreed to be sold to CoVantage in Wisconsin, adding to a trend of bank-credit union deals that has drawn backlash from many small-bank executives.

Although small banks and credit unions are enjoying healthier loan portfolios, they are also bracing for potential setbacks due to higher interest rates and inflation.

Regulators in a half dozen states have now thrown at least temporary roadblocks in front of credit unions’ effort to buy community banks.

The state's Treasurer's office is urging lenders to make loans to cover the steep costs of adoption. Participating credit unions get an extra incentive by being permitted to accept deposits from public institutions — a perk typically enjoyed only by banks.

Two years since the coronavirus began its spread, members are still hoarding savings and are hesitant to borrow due to the economic uncertainty. This has led to the industry's lowest-ever yield-on-assets ratio — a key metric for measuring financial health.

The National Credit Union Administration issued only one prohibition order in March, barring Ashley Davis, a former employee of an institution in New Jersey.

The proposed combination of Vermont State Employees Credit Union and New England Federal Credit Union would create a $3 billion-asset institution. Some past leaders worry that the deal will erase one institution's local touch.

Susan Romero, who was chief executive of Winslow Santa Fe Credit Union, has been sentenced to 26 months and ordered to pay nearly $2.4 million in restitution.

Credit unions with less than $100 million of assets are seeing their loans and membership counts shrink. M&A may be the only option for such institutions, which run on skeleton crews and have few options for cutting costs.

Farmers National Banc Corp. in Canfield has agreed to buy Emclaire Financial in neighboring western Pennsylvania — its first move across state lines.