The news a bank is changing hands or is merging with another financial institution can bring about feelings of unease and stress for its customers. In these situations, it’s natural to have questions. Many have asked, so we answered: Here’s what you need to know when your bank is bought.

What is the difference between a bank merger and a bank acquisition?

While the terms are often interchangeable, mergers and acquisitions aren’t the same. In short, a merger is when two existing companies combine into a singular, new entity. An acquisition is when one company absorbs another, but no new organization is created.

Knowing the difference is an important first step in understanding what’s happening with your bank and what to expect. When banks change names, the one that gets to keep top billing is the one in charge. If that isn’t your bank, be prepared for things to look a little different.

What happens after a bank merger or bank acquisition is announced?

While bank mergers and acquisitions aren’t inherently a bad thing, there are some important points every customer going through one must be aware of.

The first is the timeline of the process. Because all bank mergers and acquisitions must be approved by the Federal Reserve before they officially combine, the process takes months. That said, just because you don’t experience any effects in the immediate aftermath of the announcement, doesn’t mean you won’t experience any.

In the wake of your bank being bought, you will likely receive a series of notices. Some will be complex legal documents outlining the ways your bank will be changing, complete with disclaimers and action needed on your part. Others will be marketing materials telling you all the ways your bank won’t be changing. While the deluge of information may be confusing, there will be important dates to keep track of. Make sure you follow along with these notices to ensure this inconvenience does not become a serious problem.

How will I be impacted if my bank is bought?

Depending on your individual situation and the circumstances surrounding your bank’s transaction, the impact of these events can vary.

In the majority of instances, your most basic banking information, account numbers included, will change. This means you’ll need to replace any cards and update automatic payments associated with your old account once your new information is in hand. Additionally, you should anticipate changes to the bank’s fee structures and interest rates, something that can have a particularly significant impact on business banking customers.

All of this is information your bank will willingly share and walk you through. But there are also changes they may not want to talk to you about that will affect your banking experience.

What are the key things I need to pay attention to after my bank is bought?

First and foremost, if your bank is changing hands, take care to read the small print. It’s important for customers in this situation to know exactly what’s in their contract. Be on the lookout for inconsistent messaging coming from your bank, so you can get to the bottom of it before it impacts you adversely.

Another thing to pay attention to after your bank is bought is how its leadership structure is consolidating. If one bank’s leaders are staying in their positions while the other bank’s leaders see their roles change, it is an indication one bank is losing more power in the transaction than the other.

Banker retention can also be an indicator of what’s to come post-merger or acquisition. Historically, when banks are bought, employee turnover follows. Pay attention to what’s happening at your local branch — if familiar faces start to disappear, it may be an indication that a culture change is underway.

How is my banking experience going to change when my bank merges?

When two companies in similar lines of business come together, eliminations or consolidations of some kind often follow. For bank mergers, this can look like branch closures, ATM network closures, or the phasing out of certain product lines, like special savings accounts.

The degree to which the buyer bank cuts aspects of the bought bank’s products, processes, and policies varies. While it’s unlikely for any signed, fixed-term agreements to change, it’s possible that new policies relating to things like deposit rates and mortgage lending criteria will. Follow along with the notices your bank sends during this time to understand what applies to you.

Beyond just changes to products and offerings, service is likely to change, too. It’s no easy feat for organizations to combine operations while still maintaining day-to-day responsibilities, and customers often feel these pain points the most.

These changes don’t just impact personal and business banking customers — they impact communities, too. Outsiders coming in and overhauling local banks often lack the necessary market insights and local expertise to properly serve your community’s unique needs. Banks play an important role in a community’s economic growth through education, investment, services, and support, so when your bank’s leadership shifts out of your community, so does the level of local expertise and understanding — as well as the level of care and investment in your area’s long-term success.

How do I know if I need to change banks?

While the decision to stay or switch banks is situational and personal for everyone, one thing is clear: your bank losing its local presence and becoming unrecognizable doesn’t serve you. Your bankers shouldn’t just know you, but your community, too.

Your best course of action is to be diligent and thorough in your review of the materials your bank sends you, making sure to ask questions and following along with the news and timeline of the transaction. Though it may seem easier to stay put, now is the moment to be proactive in your financial affairs and weigh your options instead of sitting back and doing nothing. If your bank gives you a reason to leave, don’t think twice.

Where other banks are out of town and out of touch, Wintrust is the modern, local banking solution you can trust. For more than 25 years, we've been the bank that invests in, gives back to, and remains committed to our communities and the people living in them.  With Wintrust, you don’t have to question whether your bank has your back.

If you value personalized service, sophisticated solutions, local expertise, and working with people as invested in your success as you are, make the switch to the last remaining Chicago bank. We’ve made it easier than ever to do so, too — our new digital banking tools help you open an account in just minutes and you can manage your finances at home or on the go with ease with mobile banking, online bill pay, and other tools. We also have exclusive offerings unique to your community you can’t get with any “Old” bank, such as our exclusive Cubs & Sox accounts, clubs for students and seniors, and the only savings options offering up to $3.75 million in FDIC insurance.

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