David A. Walker
John A. Largay Professor, McDonough School of Business, Georgetown University
Report
448
Number
Jun 05 2018
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.
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?
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.
Filene thanks its sponsors for helping to make this research possible.
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