By Ray Birch
LAKE TAPPS, Wash.—A growing share of credit union–bank deals is being narrated by people who’ve actually lived them—not just the advisors and lawyers.
In the second installment of CEO Advisory Group’s whitepaper series on CU/bank acquisitions, CEO Glenn Christensen elevates two voices that often don’t appear in public: credit union CEOs who have bought banks, and the bankers who decided to sell to them. ‘
The paper (click here to get the whitepaper) is a catalyst, but the real story is in the findings—and what credit unions can learn before they step into the bank-buying arena.
Christensen says the series is designed to surface “real-world experiences” from both sides of the table.
“You get the perspective of CEOs who have gone through bank acquisitions and, just as importantly, the CEOs of banks that were acquired—what they think of the process and how it worked out for their people years later,” he told CUToday.info. That seller perspective, he adds, “hasn’t really been shared within the industry before.”
What Sellers Say—After The Ink Is Dry
One of the most striking takeaways: many selling bank CEOs stay—and thrive—inside the acquiring credit union.
“A key reason credit unions consider a bank acquisition is to acquire the talent inside the bank,” Christensen noted. “We’ve seen bank CEOs become key employees for the credit union going forward.”
Culturally, the shift is real but manageable. Former bank leaders report differences in formality and in day-to-day product focus—moving from business lending to a world thick with consumer loans—yet describe the transition as workable when onboarding and governance are well structured.
Another candid seller view: price—not politics—drives decisions. Unlike some credit union–to–credit union mergers where “social issues” can complicate outcomes, bank sellers focus on shareholder value.
“They’re not asking what’s in it for me or my board,” Christensen said. “The first question is how shareholders will be better off.”
What CU Buyers Say—Bigger, Faster, And Talent-Rich
From the credit union side, the pattern is consistent: these deals accelerate strategy. Post-close, buyers cite entry into new markets, access to new product sets, and the infusion of experienced commercial bankers. They also emphasize scale: while CU-to-CU transactions often skew small—with a few headline exceptions—bank purchases commonly range from roughly $100 million to $1.5 billion in assets, allowing buyers to fill geographic gaps or vault into an adjacent market in a single move, Christensen said.
On pricing, Christensen said credit unions have stayed disciplined, typically aiming for a premium earn-back in three to five years. Because CUs structure most deals as asset purchases—creating double taxation for the seller—CUs may pay a “slight premium” versus bank-to-bank comps, but the economics converge once pre-tax earnings to the buyer with after-tax proceeds to the seller are compared. In practice, he adds, the earn-back target (not the multiple) is the anchor for board decisions.
What To Learn Before Bidding
Christensen is clear that Part 2 of the series is meant to be practical. Several lessons surfaced repeatedly in interviews with CU leaders and advisors:
- Lead with pricing discipline and the right yardsticks. Multiples still matter, but earn-back is the decision metric that travels best from LOI through board approval
- Treat commercial loan diligence like a new sport. For CUs that have never bought a bank, the commercial book is often unfamiliar ground. “There are great insights in how to go about the whole loan due-diligence process—what to look for, how to do it,” he said
- Budget for tech catch-up. Underinvestment on the bank’s side can turn into real post-close costs. Identifying those gaps early prevents “surprise CapEx” from blowing up the business case
- Mind reserves and the macro. With economic uncertainty, reserve adequacy and stress-testing assumptions deserve board-level scrutiny
- Plan for culture on day zero. Bank and CU lending philosophies differ. Integration succeeds when leadership, credit culture, and member/customer communications are mapped with the same rigor as the pro forma
Those themes echo—and are expanded in—the whitepaper’s technical guidance, which outlines valuation tactics and diligence priorities and walks through approval choreography—NCUA for the CU, FDIC/OCC for the bank, state regulators for both, and the Fed if a holding company is involved. While CU-bank deals generally take longer than bank-to-bank transactions, Christensen said he hasn’t seen clear evidence that recent regulator restructurings have materially slowed approvals.
Pricing Reality Check
For those looking for benchmarks, Christensen points to two that matter:
- Price-to-tangible book: commonly ~1.4x–2.0x in recent CU-bank transactions (ranges vary by market, mix, and rate cycle)
- Premium earn-back: boards should expect 3–5 years as the target zone under disciplined pricing
Those numbers aren’t hard rules—they’re simply benchmarks to keep things in perspective. The series stresses that context—the bank’s earnings power under CU ownership, integration costs (especially tech), and balance-sheet sensitivity to rates—should steer the final number.
Installment 2, “Proceeding with the Deal,” pushes beyond “why buy” to “how to do it well.” It’s a field manual built from interviews with CU CEOs who have executed acquisitions and bank CEOs who have sold, plus consultants who fight these fires for a living. For credit unions contemplating a first-time purchase—or wanting a better post-mortem on the last one—the immediate takeaways are: measure what you can actually earn back, over-invest in commercial credit diligence, and recruit the people you’re buying as deliberately as the loans you’re acquiring.
“This isn’t just about writing a check; it’s about navigating complex valuations, multi-regulator approvals, and detailed due diligence that can make or break a deal,” Christensen said.
Editor’s note: CEO Advisory Group’s three-part series includes Part 1 (How to Get Started), this new Part 2 (Proceeding with the Deal), and Part 3 (Post-Merger Integration) coming soon. Part 2 features insights from executives at Dort Financial, Advia, GreenState, Harborstone, and Sound Credit Union, among others.