1 + 1 = Merger Success

How do credit unions ensure the mutual attraction that spurred a merger lasts well into the future? Find out this week on CreditUnions.com

 
 

The rate of credit union mergers has held fairly steady since 1990. The 233 mergers completed in 2001 put the merger rate at a low of 2.2% for that timeframe while the 323 mergers in 2006 and 262 mergers in 2012 put it at a high of 3.6%  Last year ended with 246 mergers under its belt while the first six months of 2014 saw 114 mergers take place.

Mergers are a fact of life. For a 20-year timeline of notable merger events, check out the Graphic Of The Week, Credit Union Merger Trends. For best practices on how to ensure a credit union delivers on all that was promised post-merger, take a lesson from the institutions featured this week on CreditUnions.com.

When $150 million Idaho State University Federal Credit Union merged with a $17 million Pocatello Teachers Federal Credit Union, it learned firsthand that big is not always better. The larger Gem State credit union had originally planned on integrating PTFCU into its existing core platform, but a year of not being able to get on its vendor’s calendar and prompting from staff convinced CEO Robert Taylor to look at the smaller institution’s core system.

“I knew it would be considered weird and unusual to switch to the smaller credit union’s platform in a merger, but it’s proved to be one of my biggest professional lessons,” Taylor says. Find out what that lesson was as well as three other best practices in Why A Weird And Unusual Core Switch Paid Off.

There’s no better way to visit a new place than in the company of a local — they know the right food, the right sights, the right routes, and a hundred other tips you’d never find in a guidebook.

For businesses, expanding into a new location has its own learning curve, that’s why when Michigan-based Honor Credit Union merged with SIR Federal Credit Union in the  state’s Upper Peninsula earlier this year, its first post-merger priority was to set up a semi-autonomous leadership team in its new UP market. The team consisted of former SIR staff members who could run the business as only a local knows how. Read more about this strategy in a Q&A with Ron Lauren — former CEO of SIR and current president of Honor’s Northern Division — and Honor CEO Scott McFarland.

Before last year, no state-chartered credit union and only four federally chartered credit unions in the history of the cooperative movement had ever acquired a bank. That changed in December 2013, when MECU of Baltimore — under the guidance of now retired CEO Bert Hash — completed the purchase and assumption of Advance Bank, a local mutual savings institution. Find out why and how the $1.2 billion credit union did this in Advance And Survive.

Illinois-based 1st MidAmerica Credit Union has completed five mergers since 2010, including two so far in 2014 and another in the works. Historically, the credit union has merged with smaller credit unions that need help to continue serving members. But during its 2010 strategic planning session, 1st MidAmerica began looking at mergers as a source of growth, and this year the $577 million institution completed its largest merger to date when it acquired a credit union with more than $60 million, 10,000 members, and slightly fewer than 30 employees. The merger represented 12% growth for 1st MidAmerica and added four branches to its footprint. Learn more about this credit union’s new merger strategy and best practices to assimilate acquired branches and employees in this Q&A with 1st MidAmerica’s vice president of marketing Amber Scott.

With practices like those highlighted this week, it won’t be difficult to keep the love alive long after the ink dries on the merger documents.

 
 

Nov. 17, 2014


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