Credit Unions' Acquisitions of Banks and Thrifts

Recently a large number of credit unions acquiring banks and have found this a timely strategy for increasing economies of scope and scale. This report examines this practice with interviews with acquiring credit unions' CEOs and a CAMEL analysis of the financial institutions prior to, and following acquisitions.

David A. Walker

John A. Largay Professor, McDonough School of Business, Georgetown University

Report Number 448

From the Center for

Performance and Operational Excellence

Executive Summary

As credit union mergers expand horizontally, they have an opportunity to reduce costs and increase fields of membership. These enterprises typically succeed well for the newly merged organizations and their members. But rarely do we hear of credit unions acquiring commercial banks and thrift institutions. Over the past six years credit unions are choosing to purchase smaller banks and savings institutions. How does this work? What conditions need to be established for these types of acquisitions to be successful? And what benefits do credit unions and their members see as a result of the acquisition?

KEEP READING

Filene Fill-In Ep. 40: Credit Unions' Acquisitions of Banks and Thrifts.

In association with this report, Filene recorded a podcast that features the report author, the legal council for almost every bank acquisition by US credit unions, and a credit union CEO who has experienced several bank acquisitions. Listen to the podcast.