LAKE TAPPS, Wash. – In the wake of credit unions completing a record 21 bank acquisitions worth $10.9 billion in 2024, CEO Advisory Group has released a new whitepaper that offers what it calls “critical insights into the complex deal mechanics that determine success or failure in these transactions.”
The white paper, “Proceeding with the Deal,” is the second installment of CEO Advisory Group’s three-part series on credit union bank acquisitions, and offers detailed guidance on pricing negotiations, due diligence processes, and regulatory approval strategies based on real-world experiences from successful transactions, according to the company.
“Once credit unions identify a target bank, the real work begins,” CEO Glenn Christensen, who is the author of the white paper, said in a statement. “This isn’t just about writing a check, it’s about navigating complex valuations, multi-regulator approval processes, and detailed due diligence that can make or break a deal.”
What’s Included
According to CEO Advisory Group, the second installment covers:
- Pricing And Valuation Strategies
- The price-to-tangible-book value, which typically ranges from 1.4x-2.0x.
- Why the “earn-back period” analysis proves more meaningful than simple price multiples for credit union decision-making.
Due Diligence Complexities
In addition, the white paper suggests there are critical areas that require expert analysis, including:
- Credit portfolio quality assessment, particularly for commercial loans unfamiliar to many credit unions;
- Technology infrastructure evaluation, as underinvestment can create significant post-acquisition costs;
- Reserve adequacy analysis, especially important given current economic uncertainties
- Cultural compatibility evaluation between commercial bank and credit union lending philosophies.
Regulatory Oversight
In addition, the credit union mergers requiring only NCUA approval, bank acquisitions involve multiple regulators, including:
- NCUA approval for the credit union
- FDIC or OCC approval for the bank
- State regulator approval for both institutions
- Federal Reserve approval if bank holding companies are involved.
Industry Sources
CEO Advisory said the whitepaper features detailed insights from industry experts who have participated in successful credit union bank acquisitions, including from Dort Financial, Advia Credit Union, GreenState Credit Union, Harborstone Credit Union, and Sound Credit Union.
The three parts of the series include:
- Part 1: How to Get Started (Available Now)
- Part 2: Proceeding with the Deal (Available Now)
- Part 3: Post-Merger Integration (Coming Soon)
For info on the complementary paper, go here.
