SNL Financial, a leading financial industry consultancy based in Charlottesville, Va., said Monday that credit unions buying banks as a way to fuel growth is a mini-trend.

SNL reported there were six instances of credit unions buying banks in recent years, with the most recent being the $406 million First Commerce Credit Union's announcement Aug. 13 it will purchase the $89 million First National Bank. First Commerce is based in Tallahassee, Fla., and First National Bank in Crestview, Fla.

The firm quoted Michael Bell, an attorney at Howard & Howard, who provided consulting services for many of the purchases, as calling it a mini-trend.

“I call it a mini-trend, only because I don't think you are going to see a thousand of them, but I think you might see a hundred,” SNL quoted Bell as saying. “This is a legitimate, viable strategy for growth for credit unions, no question about it. I think there are forces inside the credit union industry and outside the credit union industry that currently are aligned that make these transactions palatable.”

He also told the firm that he has another 10 similar transactions in the pipeline, in various states and of various sizes, adding that size need not be a limiting factor in the sales. However, he and other sources argued that size of the purchased does play a role, arguing that the banks purchased are so small they said they can't afford to keep up with increasing regulatory burden.

SNL quoted Donald Musso, president and founder of FinPro Inc, a Liberty Corner, N.J.-based consulting firm to financial institutions, on this point.

“We are talking about an $80 million bank. If we layer on compliance costs and regulation costs, it's going to make it nearly impossible for these guys to make money. If you are a billion-dollar bank, you can afford to hire a compliance officer. You can handle the regulations being thrown at you, but when you are a little $80 million bank, you can't afford to put all those resources on.”