OakNorth, the UK challenger business bank, has made its first US acquisition, a Michigan-based bank which serves retail and business customers. OakNorth is endeavouring to make a big play in the US and has lent $700M, via its UK balance sheet, in the US since it launched stateside in mid-2023.
Community Unity Bank (CUB), founded three years ago, serves mainly customers in Southeast Michigan. OakNorth, which is buying CUB, which is FDIC-insured, in an all-share deal, says the deal will mean it can expand its business lending throughout the United States.
OakNorth, which is backed by SoftBank, the Japanese investment group, lends to UK businesses with between £1m and £100m in revenue and offers business banking through savings accounts and cards. CUB marks OakNorth’s first US acquisition and third acquisition in total, following the purchase of Fluidly and Ask Partners.
Rishi Khosla, CEO and co-founder of OakNorth, said:
"In the summer of 2023 following the collapse of several US banks which had been focused on serving the lower mid-market, we saw an opportunity to step up and do our part in helping to fill the funding gap they were experiencing.
"Over the last 18 months, we’ve supported businesses with their growth ambitions, providing several hundred million dollars of capital. Demand from US borrowers continues to be exceptionally strong."
Greg Wernette, CEO, CUB, added:
"CUB was formed by bringing together entrepreneurs from around Oakland County with diverse backgrounds to meet a growing need for small business banking.
"As business owners and executives, we know that access to capital means everything, and CUB was started to meet that need, assembling a team experienced at lending during both up cycles and down cycles.
"With an entrepreneurial focus at our core, and every team member striving for customer delight, we are very excited to be joining forces with OakNorth to support an even greater number of US businesses together."
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