Feb 10 2011

Impact of Mergers on Credit Union Costs: 1984–2009

Conventional wisdom about mergers is that they reduce operational costs. And why wouldn’t they? After all, they assume advances like reductions in staff, consolidation of systems and vendors, more talented overall leadership, streamlined product structures, improved supplier pricing, and so on. Bigger is better, or at least marginally less expensive, right? But the answer, at least for credit unions, is merely “sometimes.” Find out more at Lunch with Ed: Mergers: Costs and Consequences.

In Impacts of Mergers on Credit Union Costs: 1984–2009, James Wilcox, PhD, and Luis Dopico, PhD, parse in- depth credit union merger data from 1984 to 2009 to find what actual operating gains, expressed as noninterest expense per assets (NIEXP) over five years, came out of mergers. The operational efficiency gains have been real and substantial for the smaller partners and hard- won for the larger partners.

Report Number 227