In $460 Million Deal, Two Washington State CUs Merging
Moving to protect market share, two mid-sized Washington State credit unions, Yakima Valley CU and Catholic CU, both in Yakima and located six blocks apart, are planning a June merger creating a $460 million CU.
Informal discussions between the competing CUs have been ongoing for nearly a decade but a decision to push a consolidation was triggered most recently by market forays by both banks and CUs into grabbing new loan business in Yakima, a community of 70,000 near the Oregon line.
"Not since Empower in New York, I don't remember hearing about a merger of our kind involving two healthy and well capitalized credit unions joining in the same market," said Mina Worthington, president/CEO of Yakima Valley, who will become head of the combined CU which will be rebranded with a new name.
Worthington said the 2007 combination of Empower CU with now-merged and upstate Power served as a model for the Yakima CUs in following a successful merger path.
"One of our board members saw one of those slide presentations at a meeting describing how they did it and we thought we ought to follow their lead," said Worthington, who also cited the common culture and structure characteristics of the two Yakima CUs in pursuing a partnership.
The decision to link up now, she said, was spurred by market penetration in Yakima by both Wenatchee-based Cashmere Bank and Hapo Community CU of nearby Richland opening branches and garnering indirect loans, said Worthington.
Under the merger plan, the current president/CEO of Catholic, Paul Regimbal, is slated to retire in June 2012.
A statement on the merger said both CUs have signed a non-binding letter of intent with the next step being formal application to regulatory agencies and member approval. A rebranding firm will be hired by the end of the month to come up with a new name, Worthington said, adding that D. Hilton Associates of Dallas has been the consultant on the merger.
The combined CU will employ 150 people and have eight branches serving 50,000 members in southern Washington.
Yakima Valley was started as a firefighters' CU and later morphed into a city/county CU with a community charter.Catholic was started as faith-based but also expanded into community services.