Washington CUs Plan to Merge
Two of southern Washington's largest credit unions, the $279 million Yakima Valley and the $184 million Catholic, both competitors in the same community, are planning a June merger.
The CUs, healthy, well-capitalized and six blocks apart in Yakima, said the proposed pairing works in fending off recent market intrusions by both regional banks and other CUs.
Informal discussions between the two CUs have been ongoing for nearly a decade, but a decision to push a consolidation was triggered most recently by branch and indirect loan forays by a Wenatchee bank and Hapo Community CU of Richland into Yakima, a community of 70,000 near the Oregon line.
"We know our community better than anyone, which is why we felt that a merger would give us added financial strength," explained Mina Worthington, president/CEO of Yakima Valley and the designated head of the combined CU once it receives member and regulatory approval.
The merged CU would have eight branches, 150 employees and serve 50,000 members in southern Washington.
Worthington, a director of the new Northwest Credit Union Association, told Credit Union Times that the Yakima-Catholic merger sets a recent precedent considering the last significant example of two financially healthy CUs competing directly in the same market occurred in 2007 in upstate New York.
"I think you have to look at Empower to see a similar merger," said Worthington referring to the joining of the $917 million Empire of Syracuse with Power FCU of Utica. She said the Empower merger has become a model for the two Yakima CUs in preparing for a merger.
The New York connection resulted from "a very well-done slide presentation one of our directors saw and heard at an education meeting," said Worthington, adding that the volunteer, whom she did not identify, came away impressed with the preparation and execution of that consolidation.
In the Yakima merger, Worthington said plans are being made now to begin a rebranding campaign by hiring a marketing firm to begin work in February on a new name and logo.
Worthington said management of the two CUs have long realized they share many common bonds in culture and structure and will be looking toward a revamped computer system.
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 nonbinding letter of intent with the next step a formal application to regulatory agencies and member approval. Assisting in the merger negotiations was D. Hilton Associates of Dallas, said Worthington.
Yakima Valley, noted Worthington, was started as a firefighters' CU later expanding SEGs and now with a community charter. Catholic was started as faith-based but also expanded into community services.