NCUA approved 46 mergers in Q2 of 2024 which increased from 26 last quarter. The combined assets of merged credit unions total $3.3B, which compares to $3.7B last quarter and $2.7B in Q2 2023.
The mean and median assets of merged credit unions are $72.8M and $26.4M, respectively.
There were five acquisitions of credit unions with assets exceeding $100 million this quarter. The largest acquisition is:
The median size of acquiring credit unions is $520M. There are 15 credit union acquirers with assets exceeding $1 billion and 12 credit union acquirers with assets below $100M.
With $5.3 billion in assets, Virginia CU is the largest acquiring credit union in Q2.
The acquired credit unions on average represent 5.0% of the assets of the acquiring credit unions.
There are 2 credit unions with less than $1 million in assets being acquired. The smallest credit union merger is Forrest County Teachers CU based in Hattiesburg, MS with $198,000 in assets.
When seeking regulatory approval credit unions are required to cite the reason for the merger. Of the 46 mergers in Q2, the following reasons were given:
The median net worth ratio of the merging credit unions is 10.6%. There are 8 credit unions that have net worth ratios below 7.0%, which is considered undercapitalized.
The delinquent loans-to-total loans ratio averages 1.4%. Nearly half, twenty-two (22), of the 46 merging credit unions reported negative earnings in the last 12 months. The mean return-on-assets (ROA) was -0.29% and median 0.05% in the last twelve months.
Below is a chart of the NCUA merger approvals for Q2 2024:
Bank consolidation was at a slightly slower pace than credit union mergers. There was a total of 32 bank acquisitions announced in the second quarter of 2024.
Five of the announced bank acquisitions were by credit unions. In total these banks had assets of $3.7B, which is 11% more than the combined CUs acquired in the 2nd quarter.
Only one CU announced the deal terms. In May 2024, Atlanta Postal CU announced the acquisition of Affinity Bank, with $870M in assets. The transaction was reported with a Price/Tangible Book of 159% and Price/Earnings multiple of 22.8, according to S&P Global Market Intelligence. Among all bank acquisitions reporting deal terms the Price/Tangible Book was 118%.
Among all acquired banks the average ROAA was 0.82% with only 2 reporting a negative ROAA the last twelve months before the announced M&A transaction.
Following is a deal summary of the credit union acquisitions of banks and summary of all bank transactions:
