Why Credit Unions Are Buying For-Profit Banks

Author

Kieran Ryan
August 28, 2024

Good morning, Nerders. It’s Wednesday, August 28th. In today’s newsletter, we cover:

  • Bank Acquisitions — Why not-for-profit credit unions have been acquiring for-profit banks at a record pace

  • More Startup Shutdowns — Startup shutdowns continued to accelerate in Q1 2024

  • Walmart’s Supply Chain — Its next $100B business?

TODAY’S STORY

Credit unions, not-for-profit member-owned financial institutions that accept deposits, make loans, and provide a wide array of financial services, have been scooping up for-profit banks at a record pace.

Through June 4th, twelve U.S. banks have announced plans to sell $7.21 billion in assets to credit unions, surpassing the previous record of $5.15 billion in 2022.

Credit unions are scooping up banks to:

  • Expand into new geographic areas and grow its membership base

  • Obtain specific expertise by offering more products and services

  • Diversify its balance sheet 

Credit unions are also one of the only realistic buyers in today’s environment—able to pay in cash for the bank’s assets and absorb the bank’s balance sheet from a purchase accounting standpoint, per Banking Dive.

The distinction between credit unions and banks is fading fast with every deal.

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DATA BYTES

  • The number of startup shutdowns on Carta hit a new high in Q1, with 254 company closures—a 58% increase compared to the same period last year

  • One major factor behind the rise in startup closures is the new funding environment; VCs are less active—there were more than 1,000 fewer venture funding rounds in Q4 2023 than in Q4 2021

#SHORTS

Walmart’s Next $100B Business?

@boringbusinesskieran

Walmart’s Next $100B Business? 👀 // Make sure to follow me to keep up with the latest business stories and trends #business #walmart

What’s Happening Today in Business

  • Monday, August 26th — Costco opens its first store in Okinawa, Japan, U.S. Open’s $23 cocktail, Telegram Founder arrested in France

  • Tuesday, August 27th — Kelce brothers ink $100MM podcast deal, Apple’s CFO steps down, Circle K’s owner makes a bid for 7-Eleven’s Japan holdings

If you have any comments or feedback, just respond to this email.

Thanks for reading,
Kieran & Justin Ryan