FOREST GROVE, Ore.-If the pace of credit union/small bank mergers increases, the pool of CUs that would be able to make such deals is fewer than 250.
That's according to analysis by David Bartoo, president of Merger Solutions Group, who believes there is potential for credit unions to acquire banks, but also believes the potential is limited.
"Looking at the numbers, is the possibility there for more of these bank/CU unions to take place? Absolutely, and it will happen again," said Bartoo. "But is it going to become a trend or more commonplace? I would not hold my breath on that."
There are more than 3,000 banks with total assets between $25 to $100 million, observed Bartoo, and 719 CUs with assets of $250 million or more-the Griffith Savings Bank/United FCU deal. United was in a good capital position at 11%. If they acquire a bank and bring no capital over, they can absorb the hit."
Of the 719 credit unions above $250 million in assets, only 516 are community chartered and have the ability to serve a bank's entire customer base. "We can narrow the number down even further, since only 221 from this group have greater than 10% capital," pointed out Bartoo. "You have to have the cash base. I think someone should take their hat off to United (FCU) for having an open mind and opening doors. I hope it works out well for them and the people who come over from Griffith."
