Deposit dilemma pushing mergers?
Consolidations are one component of this season of assessing balance sheets and strategic growth plans.
I read with interest the “Deposit Dilemma” article in Invictus Group’s recent Bank Insights newsletter, which asserts that the current economic situation is pushing more banks to boost their deposits through an unconventional means: mergers. I emailed mergers expert Glenn Christensen, asking “Is this what you’re seeing among credit unions, too?”
President/CEO of CEO Advisory Group, Lake Tapps, Wash., Christensen replied that he was seeing some parallels in the credit union industry—and offered the following additional thoughts:
As illustrated in the chart below, the number of credit unions with loan-to-share ratios exceeding 90 percent has tripled in the last five years among credit unions with over $500 million in assets. Among these credit unions, the average loan-to-share ratio has increased from 70 percent to 85 percent.
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