When it comes to writing the ideal manual on a successful creditunion, Mina Worthington and Paul Regimbal of Yakima, Wash., hopethey get to be principal authors.

In one of the nation's quirkier–and perhapsforetelling–consolidations of recent years, Worthington andRegimbal are joining their two healthy Washington State creditunions in an Oct. 1 merger. The two are five blocks away from oneanother.

“Look, this is a story–maybe a bit unusual–about genuinecollaboration that goes back decades among credit unions in acommunity and now has reached a timely milestone,” saidWorthington, the designated president/CEO of the newly branded $470million Solarity CU.

The merged credit union  in a central Washington cityof 90,000 combines Worthington's  $285 million YakimaValley Credit Union with and the $185 million Catholic Credit Unionheaded by Regimbal.

Both credit unions hold community charters. Yakima Valley, with30,300 members, was founded in 1939 as the Fireman's Credit Unionand later absorbed county employees. Meanwhile, Catholic waschartered in 1951 as a faith-based CU and now has 18,000members.

“I do remember the days when as CEOs, we would call each otherup to kid about which credit union was larger or who was doing theleap frogging,” recalled Regimbal, pointing to the rivalry withWorthington's predecessor CEO, Earl Weatherman.

The razzing may have been a sidelight, but the staff sharing waspervasive, ongoing and productive and maybe slightly extraordinaryamong financial competitors.

“Representing both of our credit unions, we had our monthlymanagers' breakfast where we included our branch managers and alsoinvited top staff from the five other smaller unions in the Valleyto discuss ad campaigns, business practices, policies, proceduresand new members,” said Regimbal, stressing that his CU had becomequite knowledgeable about Yakima Valley operations.

In bygone days, Catholic would even “send some of its members toYakima Valley since they had checking accounts, and they would inturn send their members to us for better certificate rates,”remembers Regimbal.

While “there was always casual discussion over the last 10years” about a merger, each CU was looking out for its owninterest, eyeing potential and smaller partners in the Yakimamarket, said Regimbal.

It was only in 2003-2004 when times were good that the Catholicboard began to conduct strategic discussions regarding the pros andcons of a merger, said Regimbal.

“But there never was an urgent issue to merge and since bothcredit unions were well-capitalized [in the 12% to 16% range] andhealthy, why the rush?” asked Regimbal, who will retire next Juneat 63. Until then he will become senior vice president of corporateintegration.

It was not until the 2008 recession and the subsequent housingcollapse gripped central Washington that merger talk moved to thefrontburner, said Regimbal and Worthington.

“It was about in the spring of 2009, about a year after I tookover the CEO job at YVCU that Paul mentioned the talk of a mergerbetween the two shops had been going on for several years,” saidWorthington.

The Yakima Valley CEO said she let him know that she would startdiscussions with her board.

But Worthington said she didn't approach her board with a planto discuss the specifics of a merger with CCU. “This was a ratherimportant topic that required extensive research and study and thathad to come from various angles, over the course of several months,bringing new ideas and discussion points to the board at eachmeeting,” said Worthington. Eventually, D. Hilton Associates ofDallas was hired.

She said directors talked about merging a small credit union orseveral small credit unions into YVCU, and they talked aboutmerging YVCU into a much larger credit union.

Finally, she recalled, the discussion with the YVCU board camedown to what issues were nonnegotiable under a merger with Catholicor another CU. They included a favorable name and preservingexisting management.

“Once the board came down to only a few items,” Worthingtonsaid, she knew she was ready to work with Regimbal to craft amerger scenario.

As part of the project, both Regimbal and Worthington attendedeach other's board meetings “so that board members could get toknow each CEO and ask questions and discuss issues,” saidWorthington.

There were plenty of probing questions from directors, but thereaction was totally positive, recalled Worthington.

One of the most sensitive was the makeup of the new managementof a merged CU. But that Regimbal told Credit Union Times was neveran issue in his mind. Fresh management and one CEO was needed torun a combined organization, he said.

The overall merger discussions with directors do indeed taketime and cannot happen in one meeting, said Worthington, addingthat getting a handle on each director's personal view or agendawas vital.

“Just because a board member is quiet or does not bring up anyissues does not mean there aren't any there, under the surface,”cautioned Worthington. She said it was important to create anenvironment where conversation could be free flowing.

Regimbal said that was equally important at his own shop as themerger idea began to percolate, commonality came into view. “Wefound that we had 37% member overlap at Yakima Valley,” a number heconsidered high.

Under the merger, no layoffs are planned among the 145employees.  “As Paul and I worked through the managementranks and the restructuring, we did find new jobs for individuals,”said Worthington. “We knew, for example, we could not have two vicepresidents of marketing.”

As for the new name, “Solarity,” Worthington said the brand waschosen to represent “energy–the liveliness of our people and thevigor that we have put into the communities we serve.”

The Solarity message is that the CU “will illuminate a path forour members to thrive,” Worthington concluded.