On-Site Coverage: Merger Strategies Come Out of the Closet
ANAHEIM, Calif. -- In a session that would have been taboo five years ago, the California and Nevada Credit Union Leagues Annual Conference was home to a session on merger strategies.
Cutting through the noise and getting to the heart of the matter, Dave Gunderson, CEO of the $595 million Credit Union of Southern California, said that credit union management and volunteers must do two things: 1) ensure the long-term safety and soundness of the credit union and 2) continue to seek ways to provide benefits to the membership and employees.
Credit unions need to look at whether a partnership with another credit union would be a plus to those affected; for many, it will not. But for those facing succession management issues, compliance challenges and wanting to offer new services to their members, a merger can be a relatively quick way of doing that.
California Agribusiness CU CEO Adam Denbo agreed. When he came on board at the credit union in 2005, it had been sending out blind letters asking CUs to merge while it was only $20 million in assets and had some unfavorable financials and little to offer a merger partner. So for a couple of years, he focused on strengthening the credit union and now has a value proposition for potential merger partners.
After a series of mergers, including one with Yamaha CU that is still marketed under that distinctive brand, California Agribusiness is now $30 million in assets and grew from 5,000 to 7,000 members. The credit union is up from one to five branches and is up to 13 employees.