Credit Union Magazine - January 2009 - (Page 31)

ay e s will stEqua h ers ou atters ls blend e ill emb owth m asil ld l mnly gr y ha O uals b ve lend e x ma asily de the CUs offer real-world advice and dea dispel popular myths about mergers. Throw away the cookie cutter. Abandon the off-the-shelf solution. Forget the formula. Experienced CEOs say mergers often confound expectations because of the many unknowns that make every credit union a unique organization. They take aim at six popular myths about the merger process. Only growth matters. Credit unions continue to merge at the rate of roughly one a day, mirroring the continuing consolidation among all financial institutions. The steady pace of mergers spawned the myth that a desire to add members and assets quickly is the sole motivation for mergers. “The reasons are many and varied,” says Mike Schenk, vice president of economics and statistics for the Credit Union National Association (CUNA). One consideration is competitive pressure to maintain efficiency while expanding products and services. “It’s much more difficult today to exist in the marketplace as a smaller institution, for example, and probably a little bit more difficult for a midsize institution,” Schenk says. “Midsize institutions are feeling the pressure to be all things to all people, and that’s an expensive undertaking.” Merger rationales may vary depending on 1 y deal s rs ers a at at att h he deal ha h m have mame t hd hm w wt wt wt wt row 2 cuna.orgÉ whether the credit union will be the “continuing” organization, which acquires the assets of the merger partner and dominates the combined operation, or the “merged” credit union, which is folded into the continuing credit union. Schenk says merged credit unions may be motivated by: u A CEO retirement; u An inability to recruit volunteers to serve on the board; u A desire to deliver more meaningful services to members; or u A significant change in the work force or location of a significant sponsor. For a continuing credit union, decisions are more likely to be based on strategic goals for growth or product and service expansion. Equals blend easily. When a large credit union merges with a smaller institution, the organizations’ relative size often determines the roles of “continuing” and “merged” credit unions. But when two credit unions of similar JANUARY 2009É Focus u Plan to spend six months to a year combining board and day-to-day operations once a merger is ﬁnal. u Expect all staff and volunteers to experience cultural adjustments. u Board focus: What’s best for the member should be the primary concern during the merger process. CREDIT UNION MAGAZINE 31 http://www.cuna.org

Table of Contents Feed for the Digital Edition of Credit Union Magazine - January 2009

Credit Union Magazine - January 2009 Contents On My Way Leading Edge Spotlight President's Perspective Game Plan Washington Insider Wright Stuff Executive Suite Reverse Mortgages Come of Age Six Merger Myths Leading-Edge Lenders TwentyFour/Seven Bankruptcy Compliance Tools of the Trade Trendlines Rates & Ratios Council Corner Shoptalk System Scan Marketplace Branching Out Advertiser Index

Credit Union Magazine - January 2009

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