The physical act of merging organizations may be limited in time and scope, but understanding how the culture and member service integrate takes longer and can result in additional challenges.
Gary Easterling, CEO of United Federal Credit Union ($901.5M in St. Joseph, MI), understands the culture challenge as he has presided over one of the most successful industry mergers in recent memory. Completed in the fourth quarter of 2006, the merger between the $480 million First Resource Federal Credit Union and the $215 million United Federal Credit Union provides an example for others considering the intricacies of combining cultures amidst the other merger challenges. Easterling says, Thesynergy between our two institutions has resulted in strong market growth, largely due to complimentary branch placements.The originating credit unions shared a home county yet were situated in opposite ends. As such, the credit union now hasa significant market presence and strength in its home county of Saint Joseph, MI.
Easterling acknowledges that the combination of cultures between the two credit unions has been slower than expected — We did have an added burden as the CEO of the combined organizations passed away right after the announcement. I started aboutsix months later and you could see the two units within the larger credit union.
The goal of most proactive mergers’ or those done to combine value of two organizations for members’ benefit rather than financial necessity is to leverage the strengths of the organizations. Easterling says, I used the visionstatement from the passed CEO to demonstrate that we truly wanted to take the best of both organizations. Yet we did try to make sure that the larger credit union’s culture didn’t overwhelm that of the smaller credit union. We wanted amerger of healthy equals, not an acquisition.
One example demonstrates the diverging interests of the two credit unions. The larger credit union had a legacy of supporting Untied Way through corporate contributions and employee support. The smaller credit union, though, had an employee charity committeewhich would raise funds from employees without corporate matching and disburse the funds based on the committee’s recommendations. Easterling comments, This had nothing to do with our core business, but had everything to do withthe cultural attitudes of the two organizations. To help blend the cultures, we maintained the corporate donation to United Way but then also matched corporate dollars with employee contributions to the charity committee. We made the commitment topreserve the value from both organizations.