The combination of VyStar and 121 Financial Credit Union — both based in Jacksonville, Florida — would have more than $14 billion of assets.

The Kansas-based buyer is pursuing deals to build out its small-business lending across several states.

Pagaya is exploring an acquisition of Sunlight, which helps homeowners finance rooftop solar panels, people with knowledge of the matter said.

The volume of bank acquisitions — either by credit unions or community banks — has dropped considerably so far in 2023. Experts, including prospective buyers, cite a combination of ongoing regulatory and economic pressures.

The Tennessee bank confirmed in its earnings report that the deal, already delayed by several months amid heightened regulatory scrutiny, likely would not close by a May 27 deadline. No new target date has been set.

As more potential buyers began inquiring about the availability of QCash, WSECU decided the time was right to offload the credit union service organization it launched in 2015.

The approval follows a deal brokered by the Swiss government last month for UBS to acquire its distressed rival.

With the acquisition, the Lake City, Florida-based community bank will nab a consumer-direct platform and expand its footprint in the Midwest.

Banks could be in for a long, slow trickle of bank failures and consolidation in the coming months and years, particularly if inflation persists and interest rates keep rising. A downturn in commercial real estate could add to banks' problems.

The Columbus, Ohio, company expects to record a pretax gain of $57 million from the transaction, which will more than offset the costs of two other recently announced initiatives.