ATLANTA–Credit unions may be emerging players in buying banks, but one analyst said the price being paid by CUs in deals to date has been less than that paid when banks do the acquiring, according to one analyst.
The increasing number of banks selling to credit unions has, not surprisingly, made its way on to a number of banking industry and investor conferences, and that includes the upcoming BankDirector’s 2020 Acquire or Be Acquired Conference in January in Phoenix.
Among the speakers on the issue at that event will be Robert D. Klingler, a partner in the firm Bryan Cave Leighton Paisner.
“There’s a lot to be said about the role of credit unions as potential buyers of many community banks, both from the perspective of the industry as a whole, and from the perspective of individual banks (and their shareholders),” wrote Klingler on a blog. “However, the vast majority of deals are still not going to involve a credit union.”
Acquisition Prices
Klingler said that while credit union accounting, capital treatment, and lack of shareholders may allow credit unions to offer higher cash offers, the “limited underlying data available doesn’t support the notion that banks can’t compete. In the four credit union transactions to date in 2019 that have publicly provided pricing, the acquisition price was 1.40 times tangible book value. In the 20 non-credit union, all-cash, transactions to date in 2019 that have publicly provided pricing, the acquisition price was 1.52 times tangible book value.”