What To Do When Your Bank Merges Or Is Acquired Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: On This Page
Westend61/Getty Images May 13, 2022 Libby Wells covers banking and deposit products. She has more than 30 years’ experience as a writer and editor for newspapers, magazines and online publications. David Schepp is a wealth editor for Bankrate, focusing on deposits and consumer banking content. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Here is a list of our . Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Change is never easy. Finding out that your bank is being bought by another bank, especially one you’ve never heard of, can cause apprehension and raise a lot of questions. Banks typically strive for a seamless merger process for customers. But integrating the assets, data, technology and customer service of two banks can cause some rough bumps. Here are steps that can ease the transition for customers and help them decide whether sticking around or finding a new bank is the best course for them. Be on the lookout for notices from the bank
If your bank is involved in a merger, you’re likely to hear about it in the media first, following a long period of approvals and paperwork, says Rutger van Faassen, who handles new markets and industry ecosystems for Curinos, a provider of data and consulting services to financial institutions. Once the acquiring bank has assumed the contractual obligations of the other bank, customers start getting notices. The acquiring bank should inform you of any changes in account structure, fees or interest rates so you can be prepared before the changes take effect. Sometimes in a merger, customers get welcome packets that tout the new products, services and benefits they will have with the new bank. But that’s not always the case. “Usually, customers receive just a legal announcement,” van Faassen says. “I’ve seen it both ways.” Thoroughly read all the letters and notices the new bank sends so that you know what to expect. Mortgage and CD customers don t panic
Customers with certificates of deposit and mortgages shouldn’t fear a bank merger. The rate and terms of a CD remain in force unless the merger is prompted by federal regulators due to a bank failure. “A CD is a fixed-rate contract. That is a legal obligation that goes with an acquisition,” van Faassen says. “They cannot break that contract in the middle of the contract.” The same is true of mortgages. A merger doesn’t nullify your agreement with your old bank. “The acquiring bank takes all those legal obligations with it,” van Faassen says. Expect changes big and small
Besides obvious changes such as new signs and logos, there are significant changes customers can expect during a merger. Bear in mind that some of these changes are ones that banks make all the time anyway, such as raising credit card interest rates, so you could experience them even if your bank isn’t acquired. New account numbers and bank routing numbers. Customers of a bank that is merging or being acquired by another bank should expect their bank routing number and account numbers to change. Different phone numbers, addresses or websites for making payments. If you have a loan, expect to be directed to a different website or given a new mailing address or phone number for making payments. Changes in fees. Fees for ATM use, safe-deposit boxes, paper statements and other services could be raised or lowered. New minimum balance requirements. There could be changes in minimum deposits to open accounts, such as a , or new minimum balance requirements to avoid monthly fees. Different interest rates. You may see changes in variable and deposit accounts. Branch and ATM locations. Customers may learn that the branch they’re accustomed to visiting is closing because of the merger. Or, the merger could result in more branches and ATMs. Business hours. The new bank might have different business hours for its branches and customer service. More services, better experience. Customers may get access to additional services after a merger, such as wealth management and financial planning, as well as more loan, deposit and investment products. Online banking and mobile apps may also improve with the merged bank. Take steps to avoid a turbulent changeover
If there isn’t a smooth conversion of the system that contains customer account information, you may have trouble accessing your money, your checks could bounce and you could wait a very long time for customer service. There are several things you might consider doing to avoid a rough transition: Keep cash on hand in case your debit card doesn’t work. Download account records so that you have documentation of deposits, payments, balances and other details. Turn off automatic bill payment and pay bills manually until the transition is complete. Arrange to get a paper paycheck or have direct deposit of your paycheck temporarily sent to another bank. Look for ways to make it work for you
One reason banks merge is to expand their customer base and geographic reach. Banks want to keep customers, not lose them. Keep that in mind if you come across issues during the merger that trouble you. For example, if you’re close to the end of a CD term or if a product will be phased out as a result of the merger, look for ways to turn that to your advantage. A bank might offer you better rates or other incentives to retain your deposits after the merger. In many cases, existing accounts and products will remain the same as long as the terms of an agreement remain in force. In some cases, customers can request a waiver to avoid changes in the terms of their accounts, says Richard Hitt, transaction advisory services practice leader for Ankura Consulting Group in Chicago. Make sure all of your deposits will be insured
Make certain that the merger of your bank with another bank isn’t going to put you over the . The FDIC insures up to $250,000 per depositor, per FDIC-insured bank, per account ownership category, such as single, joint and retirement accounts. If you have deposit accounts in the same ownership category at both banks, and they merge into one bank, all your deposits might not be insured. The good news is that the funds from your old bank are insured separately for six months, which gives you time to move your money if you need more protection. Decide whether to stay or go
A merger presents a good opportunity to decide whether it makes sense to switch banks, or find one where you can and spread out your cash so that more of it is covered by FDIC insurance. Consider what is important to you, whether it’s access to branches, competitive APYs, a broad selection of products, a feature-filled mobile app, or a bank with a global presence versus a community bank. Examine fees and minimum balance requirements. Customers shouldn’t hesitate to ask what’s going to happen with their personal data and what new technology they will be expected to use. If there is a lack of transparency, find a bank you have confidence in. “When Bank B is selling to Bank A, it’s a good time for a consumer to take stock and ask, ‘Do I like this new bank?’” says Curinos’ van Faassen. “If the disadvantages outweigh the advantages, maybe you need to go to another bank.” Shop around if you decide to switch banks
If you decide to leave the merged bank, it’s important to for another bank. Look at community, national and international banks, as well as credit unions and online-only banks. There are lots of options. Consider what products and features are important to you. What types of rates on loans and are you hoping to see? Compare products and features and then go with the bank that best fits your financial needs and personal preferences. Why banks merge and why it takes so long
Banks are interested in mergers and acquisitions for a variety of reasons. Mergers are hot now because banks are swimming in cash. During the pandemic, U.S. consumers curbed their spending and socked away money, while getting federal stimulus checks and other federal support. “Now, banks are sitting on significant levels of liquidity which they need to deploy,” says Hitt of Ankura Consulting. “Acquiring another financial institution allows them to put this liquidity to work by expanding their lending footprint and increasing their earning assets.” Banks also face heavy competition from fintech companies with substantial digital capabilities, he says. “With this increased competition, banks have had to make significant investments in their technology and online banking platforms, thus increasing the cost of doing business,” Hitt says. “An acquisition allows the buyer to spread those costs over a larger customer base, enhancing the profitability of the combined entity.” A merger is a good way for small or midsize banks to grow. The merger of regional banks CIT and First Citizens, for example, which was completed in January, gave First Citizens Bank over $100 billion in assets and puts it among the top 20 banks in the U.S., based on assets. Once a bank merger is announced, the switchover can take up to a year. There are a lot of regulatory requirements to meet, and integrating systems and data takes time. “The larger the institution, the longer it takes,” Curinos’ van Faassen says. Bottom line
Mergers and acquisitions are common in the financial sector. Worldwide, there were over 63,000 of them in 2021, according to Statista, a provider of market and consumer data. A merger can be advantageous for many customers but a change for the worse for others. Customers of local credit unions and community banks are typically the least happy when a acquires their bank. “When you have a larger national bank acquiring a regional bank you could lose some local flavor,” van Faassen says. If your bank is being acquired, learn all you can and weigh the pros and cons before making a decision about whether to stay or to go. SHARE: Libby Wells covers banking and deposit products. She has more than 30 years’ experience as a writer and editor for newspapers, magazines and online publications. David Schepp is a wealth editor for Bankrate, focusing on deposits and consumer banking content. Related Articles