British fintech firm OakNorth has announced the acquisition of Michigan-based Community Unity Bank (CUB) in a stock-for-stock transaction, marking a major step in its expansion into the U.S. market. The deal, which is pending regulatory approval, will allow OakNorth to strengthen its business lending capabilities across the country, particularly in Michigan.
Founded in 2015, OakNorth focuses on lending to mid-sized businesses that are often underserved by traditional banks. To date, the company has provided approximately $16 billion in loans across various industries, supporting the creation of 56,000 jobs and 34,000 new homes in the UK and U.S. Its entry into the U.S. market in mid-2023 has already resulted in over $700 million in lending, benefiting businesses such as F1 Arcade, Ultimate Performance, and The Boundary, which operate in both the U.S. and the UK.
CUB, which launched in 2023, is a community bank based in Birmingham, Michigan. It was founded by local entrepreneurs to address the increasing demand for small business banking services. With a strong focus on commercial lending, the bank has positioned itself as a key financial partner for businesses in Southeast Michigan. As part of the acquisition, CUB’s CEO, Greg Wernette, will transition into the role of CEO for OakNorth’s U.S. operations, bringing his experience in commercial banking and lending to help drive growth.
OakNorth’s CEO and co-founder, Rishi Khosla, explained that the company saw an opportunity to step in and provide financial support for mid-sized businesses following the collapse of several U.S. banks in 2023. Over the past 18 months, OakNorth has exceeded its initial lending expectations in the U.S., issuing significantly more loans than anticipated. This rapid growth has reinforced its belief that there is strong demand for alternative banking solutions in the country.
The acquisition strengthens OakNorth’s presence in the U.S. market by combining its technology-driven lending approach with CUB’s local expertise. By integrating the two institutions, OakNorth aims to enhance its service offerings and provide more businesses with the capital they need to grow. The deal reflects the company’s commitment to expanding its footprint in the competitive U.S. banking sector while continuing to support mid-sized businesses that often struggle to secure financing.
