This is a story about the power of shared vision and the valueof daring to dream big dreams. It is about taking risk and thepotential reward of serving others in need. Thus starts the journeyfrom the frozen mountain peaks of Alaska to the sandy beaches ofHawaii.

During a series of strategic planning meetings held in 2009 and2010, the board and management of Matanuska Valley Federal CreditUnion identified the need to diversify our membership.

Started in 1948, MVFCU has a community charter and serves alarge geographic area in south central Alaska.

The field of membership stretches from the edge of DenaliNational Park to the outskirts of Anchorage, Alaska. During thepast two decades, the credit union benefited from a vibrant andgrowing local economy. As an energy producing state, Alaska haslargely avoided the recent economic recession. However, we willnever forget the mid 1980s when there was a sudden collapse in oilprices and the state’s economy experienced a rapid decline. Ourlocal real estate market went into a free fall, similar to some ofthe hardest hit regions in the lower 48 today.

During our planning meetings, we were challenged to think aboutthe next 15 years. What would a diversified membership look like?If we could create our own future, where would we go? It wasnatural for us to consider expanding to the underserved areas inAlaska. We have experience helping smaller credit unions in otherparts of Alaska, but did this really represent truediversification? Why not go to some place we all want to be? Hawaiiwas mentioned as a lark but the more we discussed and researchedthe 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 spreadover a huge land mass. Hawaii is a tropical paradise with a largeportion of its population concentrated on the small island of Oahu.We analyzed employment trends for both states over a 20-year periodand the two economies are somewhat counter cyclical. Alaska creditunions consolidated years ago; today, there are only twelve basedin Alaska. Hawaii has over 80 credit unions, although many of themare small.

With a new vision statement of “serving Alaska and Hawaii”formally adopted, we really had no idea how that might actuallyhappen. It was hard to imagine that in less than two years, ourvision would become reality. In the summer of 2011, during our NCUAexamination, 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 balancesheet. As it turned out, our reasoning was in perfect alignmentwith NCUA’s concern for concentration risk.

Several months later, we became aware of a small credit unionthat was in financial distress and need.

After completing our due diligence review, we submitted a bid toNCUA to acquire Kunia Federal Credit Union through an emergencymerger. Kunia was the perfect fit for us. Established in 1940 toserve the workers on the Del Monte Corp. Pineapple Plantation,Kunia had converted to a community charter in 2006 when theplantation closed.

Like many small single group credit unions, Kunia had adifficult time making the adjustment to serving a broadercommunity. However, we were very impressed by the level ofdedication and commitment to service at Kunia and the high degreeof member loyalty to the credit union.

The merger was completed last January and the single officelocated in Waipahu is now serving members as the Kunia CommunityOffice of Matanuska Valley FCU. We completed the conversion oftheir data system on April 1 and are planning to modernize andexpand the community office later this year. We currently haveapproximately 2,200 members in Hawaii, with a potential membershipof 62,000.

Virtually all of our marketing material, including brochures,posters and ads had to be duplicated, removing all the scenes ofmoose and snow-covered mountains and replacing them with sand andpalm trees. Also, a new website was developed just for our newKunia membership.

What are the main takeaways from this experience? First, thepower of vision is amazing. The fact that we had “serving Hawaii”in our long-term plan created opportunity for us that would nothave presented itself otherwise. Second, dare to dream but makesure your motives and rationale are sound. Credit union philosophyis all about people helping people. Credit unions exist not forprofit, not for charity, but for service.

This motivation of service makes all the difference in theworld. Also, the need for diversification was important, and Hawaiiwas a good solution to the issue of concentration risk. The thirdand final lesson is that when opportunity appears, you must beprepared to act and willing to take risk. Our credit union wasfinancially healthy with internal capacity to manage the merger. Wewere aligned in our decision making, having already chosen ageneral direction. Without these strengths, we could not have movedforward.

The real test of whether or not the vision of serving bothAlaska and Hawaii will be successful will come one satisfied memberat a time. We must never forget our roots in Matanuska Valley, theheart of Alaska. At the same time, we must respect and learn fromKunia’s rich history and culture. As we embark on our journey ofgetting to know each other and build on a cornerstone of trust andrespect, new and exciting opportunities will emerge. Our vision isto take the best of both organizations and together create a newand better credit union. 

Al Strawn is president/CEO of Matanuska Valley Federal CreditUnion.
Contact 907-745-9140 [email protected]