This is a story about the power of shared vision and the value of daring to dream big dreams. It is about taking risk and the potential reward of serving others in need. Thus starts the journey from the frozen mountain peaks of Alaska to the sandy beaches of Hawaii.
During a series of strategic planning meetings held in 2009 and 2010, the board and management of Matanuska Valley Federal Credit Union identified the need to diversify our membership.
Started in 1948, MVFCU has a community charter and serves a large geographic area in south central Alaska.
The field of membership stretches from the edge of Denali National Park to the outskirts of Anchorage, Alaska. During the past two decades, the credit union benefited from a vibrant and growing local economy. As an energy producing state, Alaska has largely avoided the recent economic recession. However, we will never forget the mid 1980s when there was a sudden collapse in oil prices and the state’s economy experienced a rapid decline. Our local real estate market went into a free fall, similar to some of the hardest hit regions in the lower 48 today.
During our planning meetings, we were challenged to think about the next 15 years. What would a diversified membership look like? If we could create our own future, where would we go? It was natural for us to consider expanding to the underserved areas in Alaska. We have experience helping smaller credit unions in other parts of Alaska, but did this really represent true diversification? Why not go to some place we all want to be? Hawaii was mentioned as a lark but the more we discussed and researched the idea, the more it made sense.
In many ways, Alaska and Hawaii are exact opposites. Alaska, with snow and ice most of the year, has a smaller population spread over a huge land mass. Hawaii is a tropical paradise with a large portion of its population concentrated on the small island of Oahu. We analyzed employment trends for both states over a 20-year period and the two economies are somewhat counter cyclical. Alaska credit unions consolidated years ago; today, there are only twelve based in Alaska. Hawaii has over 80 credit unions, although many of them are small.
With a new vision statement of “serving Alaska and Hawaii” formally adopted, we really had no idea how that might actually happen. It was hard to imagine that in less than two years, our vision would become reality. In the summer of 2011, during our NCUA examination, our examiner asked for a copy of our strategic plan. He quickly became interested and intrigued by our vision.
I explained the desire to diversify our membership and balance sheet. As it turned out, our reasoning was in perfect alignment with NCUA’s concern for concentration risk.
Several months later, we became aware of a small credit union that was in financial distress and need.
After completing our due diligence review, we submitted a bid to NCUA to acquire Kunia Federal Credit Union through an emergency merger. Kunia was the perfect fit for us. Established in 1940 to serve the workers on the Del Monte Corp. Pineapple Plantation, Kunia had converted to a community charter in 2006 when the plantation closed.
Like many small single group credit unions, Kunia had a difficult time making the adjustment to serving a broader community. However, we were very impressed by the level of dedication and commitment to service at Kunia and the high degree of member loyalty to the credit union.
The merger was completed last January and the single office located in Waipahu is now serving members as the Kunia Community Office of Matanuska Valley FCU. We completed the conversion of their data system on April 1 and are planning to modernize and expand the community office later this year. We currently have approximately 2,200 members in Hawaii, with a potential membership of 62,000.
Virtually all of our marketing material, including brochures, posters and ads had to be duplicated, removing all the scenes of moose and snow-covered mountains and replacing them with sand and palm trees. Also, a new website was developed just for our new Kunia membership.
What are the main takeaways from this experience? First, the power of vision is amazing. The fact that we had “serving Hawaii” in our long-term plan created opportunity for us that would not have presented itself otherwise. Second, dare to dream but make sure your motives and rationale are sound. Credit union philosophy is all about people helping people. Credit unions exist not for profit, not for charity, but for service.
This motivation of service makes all the difference in the world. Also, the need for diversification was important, and Hawaii was a good solution to the issue of concentration risk. The third and final lesson is that when opportunity appears, you must be prepared to act and willing to take risk. Our credit union was financially healthy with internal capacity to manage the merger. We were aligned in our decision making, having already chosen a general direction. Without these strengths, we could not have moved forward.
The real test of whether or not the vision of serving both Alaska and Hawaii will be successful will come one satisfied member at a time. We must never forget our roots in Matanuska Valley, the heart of Alaska. At the same time, we must respect and learn from Kunia’s rich history and culture. As we embark on our journey of getting to know each other and build on a cornerstone of trust and respect, new and exciting opportunities will emerge. Our vision is to take the best of both organizations and together create a new and better credit union.
Al Strawn is president/CEO of Matanuska Valley Federal Credit Union.
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