Go big or go home. That’s the bold message from investment banker Peter Duffy of Piper Sandler and for some years he has been in the thick of credit union mergers.
And Duffy is here to say there’s a new trend. Used to be, most credit union mergers involved a shoebox credit union getting devoured by a bigger one. You know why that played out. Usually, the small credit union had reached a point where its viability was questionable and the regulator, with winks and nods and maybe a shove, engineered a shotgun marriage with a bigger, healthier institution.
According to Duffy, that is changing and now very big credit unions – some with well over $1 billion in assets and healthy balance sheets – are talking “mergers of equals” with like-sized institutions.
Why? It just is getting tough to compete with the money center banks who control an ever expanding piece of the financial pie. Add in the competition of fintechs and, suddenly, institutions with assets under, pick a number, $500 million? $1 billion? $5 billion? Are finding it ever tougher to thrive.
And $5 billion, by the way, often is the number that survival-oriented big credit unions have their eye on, says Duffy.
Duffy also posits that what he calls Covid fatigue is wearing out many credit union senior managers and lots of board members. A merger to them may appear to be a great exit strategy.
Along the way in this podcast Duffy throws out lots of Piper Sandler research findings on what it takes to succeed today. Take notes. This is excellent stuff.
You won’t sleep well after listening to this – but you just may hear your path to institutional survival.
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