Deteriorating financial condition, diminishing market and member growth and losing sponsor support force many credit unions to merge.
But there are some credit unions that don’t merge out of necessity. Instead, equally strong credit unions such as the $51 million Preferred Federal Credit Union in Greenville, Mich. and that $88 million Grand Valley Co-op Credit Union in Grand Rapids, Mich., have decided to merge for a different reason.
Both credit unions are not merging because of capital issues or lack of growth, explained Robert Shane, executive vice president and chief operating officer for Grand Valley Co-op.
Instead, he said, both organizations understand they can meet the needs of members in western Michigan more effectively as one larger credit union rather than as two separate credit unions.
If approved by members and regulators, the 10,289-member Preferred FCU in Greenville, Mich. will merge into the 14,085-member Grand Valley Co-op CU in Grand Rapids, Mich., by July 1.
Although Preferred FCU is merging into Grand Valley Co-op, the new name of the credit union will be Preferred Credit Union.
“We’re going to take advantage of the state charter because Michigan is a very friendly credit union state, and as Preferred Credit Union we’ll have a whole lot more opportunities to reach members in the community and in the surrounding communities,” Shane said.
Serving western Michigan, both credit unions have strong financials and membership growth. Grand Valley Co-op’s net worth is 11.42% and Preferred FCU’s net worth is 9.57%. Grand Valley’s membership has grown from 13,882 in 2011 to 14,127 in 2012. Preferred FCU’s membership has increased from 10,155 in 2011 to 10,238 in 2012.
Grand Valley’s 34 employees and Preferred’s 24 employees will retain their jobs and no branches will be closed, the credit unions said.
“The beauty to me in this (merger) endeavor we are working through is that we are asking the questions on what is the best way to do things – not as Grand Valley would do it or how Preferred would do it, but rather how we do it as a new organization,” said Shane. “And that is a pretty exciting opportunity.”