OakNorth, a leading digital commercial bank for entrepreneurs, has announced the acquisition of Community Unity Bank (CUB), a Michigan-based, FDIC-insured community bank.
The deal, structured as a stock-for-stock transaction, is subject to regulatory approval. This move follows OakNorth’s regulatory authorisation in August 2024 from the Federal Reserve and the New York State Department of Financial Services to establish a Representative Office in New York. The acquisition will enable OakNorth to expand its business lending operations across the United States, particularly in Michigan.
Founded in 2015, OakNorth focuses on supporting lower mid-market businesses—those with revenues between $1m and $100m—by offering tailored financial solutions and flexible debt financing. The bank utilises data and analytics to bring larger-scale lending approaches to this segment, using a forward-looking methodology to assess industries and businesses.
Since its inception, OakNorth has provided approximately $16bn in loans across various sectors, ranking among the top 1% of commercial banks globally in terms of return on assets (ROA) and efficiency ratio. Its financing activities have contributed to the creation of 56,000 jobs and 34,000 new homes in the UK and US, with a strong focus on affordable and social housing. OakNorth entered the US market in mid-2023 and has since provided over $700m in loans, including to companies operating in both the UK and US, such as F1 Arcade, Ultimate Performance, Croud, and The Boundary.
CUB, launched in 2023, is a community bank based in Oakland County, Michigan, offering a comprehensive range of banking products to businesses and individuals, with a strong emphasis on Southeast Michigan. It has built a team of experienced local bankers, dedicated to fostering relationships with businesses and supporting their expansion through funding and deposit services. The acquisition will provide OakNorth with a solid foundation for its US expansion, with CUB CEO Greg Wernette set to become CEO of OakNorth’s US Bank.
Commenting on the acquisition, OakNorth CEO and co-founder Rishi Khosla 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 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. 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.”
CUB CEO Greg Wernette added, “Our Board, along with Founder Andy Meisner, had a vision of filling a void in the small business community and serving our customers with a personal touch and outstanding products and services. 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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