What Does It Mean For Me When My Bank Merges With Another?

As they say, change never comes easy. Receiving the news that your bank is merging or being bought by another can prove unsettling and cause apprehension. Sure, banks strive to make the merger process seamless for customers. But it's never that straightforward – integrating the technology, customer service, data, and assets of two banks can rock the boat.

So, what does a merger mean for you, the customer, and what should you expect? Read on to find out!

Expect Changes

As soon as the merging banks agree on the contractual obligations, customers begin receiving notices. The new bank should update you on any changes in interest rates, fees, and account structure, so you can brace yourself as the changes take effect.

Again, the bank will try to minimize disruption as much as possible during the transition. After all, it still wishes to retain its current customer base by ensuring almost everyone is satisfied, and therefore, ensuring you're happy is in the bank's interest.

But sometimes, the changes brought by aren't that alluring. That said, here are typical changes to anticipate from a merger:

  • Terminated or replaced product lines: Products, services, and benefits once enjoyed by customers are disregarded or sometimes replaced with a new set, which may not be as appealing.
  • Changes in fees: The new bank could decide to raise or lower fees for paper statements, safe-deposit boxes, ATM use, and other services. But such information is communicated in advance, giving you time to think about the next course of action – try out a different account type best suited to your interests. Or a new bank altogether.
  • Different interest rates: It's highly likely for your interest rates to change with the merger. While the difference may not be as notable, considering today's interest rate environment, you must understand its long-term impact on your accounts.
  • Branch and ATM locations: Some merger cases may involve consolidating resources, resulting in the closure of branches and ATMs you may have been accustomed to visiting.
  • New ATM cards, bank routing numbers, and account numbers: After a merger, you can expect to be migrated over to new accounts, bank routing numbers, and ATM cards bearing the new bank's brand.
  • Unreliable new technologies: During the transition, mobile and online banking systems are often temporarily down, probably due to trying out new technologies.

No Panic for CD and Mortgage Customers

A bank merger is nothing to fear for customers with mortgages and certificates of deposit. In other words, the acquiring bank can't nullify the mortgage contract with your old bank but instead assumes all the legal obligations.

The case isn't any different for a certificate of deposit – the terms and rate of a CD stay in effect unless a bank failure arises, forcing federal regulators to prompt the merger.   

Pay Attention to Your FDIC Coverage

You might want to ensure that your bank's merger with another doesn't put you over FDIC's $250,000 insurance limit. This insurance cover's each deposit account and is only exclusive to FDIC-insured banks. If you own separate deposit accounts of a shared ownership category (retirement, joint, and single accounts) at each merging bank, the insurance may not cover all your deposits.

On the bright side, however, your funds from each of your old accounts still have six months of separate insurance coverage after the merger. That means you'll have more than ample time to move your money to another establishment if necessary.

If you're in the greater Southwest Florida region, why not try a customer-focused bank like Liberty Savings Bank. We boast a dedicated and professional retail team that makes sure we're top-game in delivering the best banking products and services possible for you. Reach out to us today and enjoy the perks of partnering with us!

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