OakNorth, the British digital banking unicorn, has acquired a US community bank as it eyes overseas expansion.
The firm announced on Monday it had agreed on a stock-for-stock transaction for Michigan-based Community Unity Bank (CUB).
The acquisition is subject to regulatory approval and follows the Federal Reserve and New York State Department of Financial Services granting OakNorth authorisation for a Representative Office in New York.
The bank, launched in 2015, is chaired by former City watchdog chair Lord Turner and said it serves the “missing middle” – growing businesses typically between £1m and £100m in turnover.
The lender’s profits hit £215m in 2024 after the firm surpassed £12bn in total lending.
OakNorth’s co-founder and chief executive Rishi Khosla said: “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.
“These values are reflected in its customer feedback, as well as its strong company culture.”
Khosla added demand from US borrowers continued to grow and the firm’s “differentiated offering and unique approach” paved the way for a strong presence in the US market.
He said lending had nearly tripled initial expectations as a result of US activity.
Community Unity Bank’s chief executive Greg Wernette said: “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.”