The $360 million Connexus Credit Union is carving out a special merger path in its central Wisconsin hometown by consolidating two of its smaller competitors.
Connexus President/CEO J. David Christenson maintains that the takeover of the $45 million Tower CU and the $11 million Maple Hill CU will help spur member growth and enhance the product line. And he has empathy for smaller peers who find themselves struggling to turn a profit against tough odds.
“It’s kind of sad what has happened to many credit unions because every time we lose one we diminish our strength,” said Christenson.
Christenson, a former state savings and loan commissioner before joining a CU, said the addition of the two represent a natural fit for his Wausau, Wis.-based CU to add loans and members. Industry sources noted that discussions between Connexus and boards of the two CUs have been underway for months, and, in the case of Tower, for years.
Once both mergers are complete, Connexus would have 11 branches and 62,000 members.
Connexus said the addition of Maple Hill and Tower would greatly strengthen the CU’s financial literacy programs, particularly among educators. He noted that Tower has a branch in a high school while Connexus has been making advances at a local technical college.
Founded in 1935 to serve employees of Wausau Insurance Companies, Connexus also counts membership among Liberty Mutual Insurance, the Boston carrier, as well as a Wisconsin health care firm under an SEG structure.
Of the two CUs being merged, Tower has suffered the most. It posted a $660,000 loss for 2011 following a $575,000 loss a year earlier, but its capital ratio has remained steady.
Following the Feb. 17 merger proposal announced for Maple Hill, Christenson lamented the plight of small CUs in Wisconsin and elsewhere opting for mergers but did not see any direct tie to a recent spurt of mutual bank conversion talk.
Christenson said any move to convert to a mutual bank is off the radar for his CU. He said he doubts many other Wisconsin CUs favor conversion.
“Banks share the same regulatory burden as we do and so what makes you think the FDIC will be any easier?” asked Christenson, drawing on his own experience as an S&L regulator in the late 1990’s.