OakNorth has announced that it has agreed to purchase Community Unity Bank (CUB), the home-grown, FDIC-insured community bank based in Birmingham, Michigan, in a stock-for-stock transaction.

The acquisition will enable OakNorth to expand its business lending throughout the US.
CUB, which launched in 2023, provides a full-service suite of banking products to businesses and individuals, primarily in Southeast Michigan.

OakNorth said the bank has a high quality team of bankers with decades of experience in the local community and has established relationships with a broad range of local businesses.

The neobank added that CUB’s team will provide a solid foundation for OakNorth’s continued expansion across the US.

Greg Wernette, CUB’s chief executive, will serve a chief executive of OakNorth’s US Bank.
The terms of the deal were not disclosed and the transaction is subject to regulatory approval.

OakNorth began operating in the US in mid-2023 and has since lent over $700 million to businesses there, including to several of its existing customers with US and UK operations.

In August last year, OakNorth received authorisation from the Federal Reserve and the New York State Department of Financial Services for a Representative Office in New York.

In a recent financial statement covering 2024, the neobank said it provided over £2.1 billion of gross new lending, which was driven by significant demand from its operations in the US.

Rishi Khosla, chief executive and co-founder of OakNorth, said that following the collapse of several US banks which were focused on serving the lower mid-market, OakNorth saw an opportunity to help fill the funding gap and has provided “several hundred million” dollars of capital over the past 18 months.

“Demand from US borrowers continues to be exceptionally strong and our differentiated offering and unique approach to lending has enabled us to rapidly establish a strong presence in the US market, resulting in us lending c.3x our initial expectations,” he added. “As a founder-led business built by entrepreneurs, CUB appealed to us as it shares a lot of our same values with regards to customer experience.”

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