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 When Your Bank Merges

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.

Terminated or replaced product lines

Customers may find that products, services, and benefits they previously enjoyed are either disregarded or substituted with a new set, which may not be as enticing or attractive.

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 and account numbers

After a merger, you can expect to be migrated over to new accounts 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.

What Happens to Routing Numbers When Banks Merge?

During a bank merger, one important question that may arise is what happens to the routing numbers. Routing numbers are unique identifiers assigned to each bank and are used for various financial transactions, such as direct deposits and electronic transfers.

When banks merge, the acquiring bank typically takes over the routing numbers of the bank being merged. This means that customers of both banks will eventually have to update their routing numbers to reflect the new bank. The acquiring bank will communicate the changes to its customers, providing them with the new routing numbers and instructions on how to update their accounts.

Updating routing numbers can be a hassle, but it is a necessary step to ensure that your financial transactions go smoothly after the merger. Most banks provide clear instructions on how to update your routing numbers, whether it's through online banking, visiting a branch, or contacting customer service.

No Panic for CD and Mortgage Customers When Banks Merge

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.

Major Bank Mergers Timeline Since 2013

2013:

• BB&T acquires Susquehanna Bancshares: This $2.5 billion deal solidified BB&T's footprint in the Mid-Atlantic region, expanding its presence in Maryland, Pennsylvania, and Virginia.

• PNC Financial Services Group acquires Wachovia's Southeast Banking Operations: This $12.1 billion deal positioned PNC as a major player in the Southeast, acquiring 331 branches across six states.

2014:

• TD Bank acquires Chrysler Financial: This $6.6 billion deal strengthened TD Bank's position in the U.S. auto finance market, adding over 1.4 million customer accounts.

• SunTrust Banks acquires BB&T: This $28 billion merger, at the time the largest bank merger in U.S. history, created Truist Financial, the sixth-largest bank in the U.S.

2015:

• Wells Fargo acquires Wachovia: This $116 billion deal, finalized in 2015, solidified Wells Fargo as the world's largest bank by deposits at the time.

2016:

• Banc of America acquires Merrill Lynch: This $48 billion deal further diversified Banc of America's portfolio, integrating Merrill Lynch's wealth management expertise with its banking infrastructure.

2017:

• Fifth Third Bancorp acquires MB Financial Inc.: This $5.4 billion deal expanded Fifth Third's footprint in the Chicago market, adding approximately 130 branches.

• PNC Financial Services Group acquires United Bankshares, Inc.: This $5.5 billion deal solidified PNC's dominance in the Mid-Atlantic and Midwest regions, adding 564 branches across eight states.

2018:

• KeyCorp acquires First Niagara Financial Group: This $1.3 billion deal strengthened KeyCorp's presence in Upstate New York and Western Pennsylvania, adding 146 branches.

2019:

• BB&T and SunTrust Banks merge to form Truist Financial: This $66 billion merger created the sixth-largest bank in the U.S., with over 2,700 branches across 17 states.

2020:

• PNC Financial Services Group acquires BBVA USA: This $11.6 billion deal solidified PNC's footprint in the Southeast and Southwest, adding 589 branches across five states.

2021:

• Truist Financial acquires Branch Banking & Trust Company: This $1.7 billion deal strengthened Truist's presence in the Carolinas, adding 89 branches across North Carolina and South Carolina.

2022:

• Citizens Financial Group acquires 807 branches from Wells Fargo: This $8.5 billion deal significantly expands Citizens Financial's retail banking presence, particularly in the Northeast and Midwest.

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!