Mergers occur in the credit union industry for a number of reasons, and if recent history is any indicator, they're not going away anytime soon. In fact, they might become more prevalent as innovation and change favor size and scale.
Since 2004, the decline in charters has been similar at credit unions and banks. In the past decade, an average of 250 institutions have merged every year. As competition increases and credit unions broaden their product and member service offerings, the rate of mergers will likely continue at this pace. For more merger data, check out the Graphic Of The Week, 4 Charts About Credit Union Mergers.
Elsewhere this week on CreditUnions.com, credit union leaders offers tips and insights on how to build a united credit union after a merger.
A credit union’s core processing system lies at the heart of its operation, and combining that central data depository and transaction nerve center is typically the last step in completing a merger. Integrating data can be a challenge, but credit unions that follow a well-crafted plan that accommodates uncertainties can create a successful, welcoming transition for staff and members.
“If you plan well, the surprises should be minimal,” says Genisys Credit Union president and CEO Jackie Buchanan.
In Core Advice For Post-Merger Integration, Buchanan joins Peter Paulson, president and CEO of Corporate America Family Credit Union; Michelle Wall, COO of ICON Credit Union; and Mark Brennan, president and CEO at Clearview Federal Credit Union, in outlining practices that have worked at their credit unions and tips on how to avoid extraneous fees. After all, the quartet has nearly a dozen mergers under their belts. Read more today.
When asked about the changes Park Side Financial Credit Union has made in the past several years — among them a federal to state charter conversion, a logo and branding change, a core data systems conversion, and a merger with Gateway Community Federal Credit Union — president and CEO Jeremy Presta jokes, “We’re gluttons for punishment.”
With any merger, managing employee expectations is an involved but important process. In How To Integrate Two Employee Teams After A Merger, Presta describes how Park Side prepared and integrated its workforce.
The 2010 merger of NuUnion Credit Union with Detroit Edison Credit Union was nearly a match made in heaven. The two Michigan-based organizations had similar asset bases of approximately $850 million for NuUnion and $750 million for Edison, side-by-side geographic footprints, and a shared drive to develop greater efficiencies for the benefit of members.
The resulting institution, Lake Trust Credit Union, is a powerhouse that at year-end 2014 served more than 160,000 members, employed nearly 400 people, and operated 20 central Michigan branches, according to data from Callahan & Associates.
Former NuUnion CEO Steve Winninger says the merger was a huge undertaking, far more complex than the typical big-fish-eating-little-fish union of unequals.
On the one hand, Winninger, Detroit Edison CEO Bill Thiess, and their boards set out to design an organization without legacy baggage and without assumptions about what would work and what would not. On the other hand, they knew a major benefit of a merger comes from integration and, as much as possible, they wanted to meld the management teams of their prior credit unions without the natural bias each had toward the people they’d worked with for so many years.
Learn more about how Lake Trust melded upper management as well as the board of directors in A Merger Of Two Equals Means Melding Leaders And Boards.
It's a great week on CreditUnions.com.