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BRISBANE, Calif. and BLOOMINGTON, Minn. – O’Rourke, Sacher & Moulton (OSM), the leading credit union auditing and consulting firm in the U.S. has merged with RSM McGladrey, a leading accounting, tax and consulting firm for mid-size companies in the U.S. The merger, effective August 1, combines O’Rourke’s 550 credit union clients with RSM McGladrey’s 200 credit union clients to form the largest credit union consulting practice in the U.S. In addition, to ensure independence for its attest services, including audits and reviews, O’Rourke, Sacher & Moulton transferred its attest function to McGladrey & Pullen, LLP, a national CPA firm based in Minneapolis, Minn. owned by H&R Block. The combined McGladrey companies (RSM McGladrey the consulting firm and McGladrey & Pullen the CPA firm) represent the sixth largest CPA firm in the U.S. with 100 offices nationwide located in the principal cities in the country. The merger creates a National Credit Union Division each within RSM McGladrey and McGladrey & Pullen. The divisions will be known as “O’Rourke Consulting, a part of RSM McGladrey” and “O’Rourke Sacher & Moulton, a part of McGladrey & Pullen,” respectively. The two divisions will each be headed by Gene O’Rourke, former president/CEO, O’Rourke, Sacher & Moulton. They will focus exclusively on credit unions and be run as an independent business unit within the McGladrey structure. O’Rourke’s merger with RSM McGladrey and McGladrey & Pullen comes on the heels of its merger with Career Connections Inc., an affiliate of the California Credit Union League (CU Times, July 25) and the formation of O’Rourke Career Connections LLC. Unlike that merger which only involved the human resource division of O’Rourke, the latest merger involves the four units of the company: information technology security consulting, internal audit outsourcing, operations consulting, and executive search. All the units, with the exception of executive search, will be owned 100% by RSM McGladrey. The executive search unit because of its previous merger with Career Connections, will be owned equally by RSM McGladrey and the California Credit Union League. “Although community banks have accounted for the majority of RSM McGladrey’s business, the company believes the credit union industry will be one of the dominant providers of retail financial services to the American middle market in the future. Credit unions are making long term inroads with community charter expansions. RSM McGladrey is convinced credit unions will be a vital part of the financial future for consumers,” said O’Rourke. “As the credit union industry grows in size and sophistication and increasingly converts to community charters, it requires more sophisticated consulting services in areas like how to assess markets and conduct demographic studies, how to execute their community charter expansion authority. It’s one thing for credit unions to apply for community charters, executing that opportunity is the real challenge,” said O’Rourke. “RSM McGladrey has the expertise in things like the ability to comprehensively assess markets and executive community charter opportunities, earnings enhancement and operations and workflow reengineering. They are particularly strong in tax planning and advising. Joining RSM McGladrey allows us to offer targeted consulting and tax services to credit unions that are expanding their markets, member products, and CUSO offerings,” O’Rourke continued. In addition to the 100 credit unions it audits and consults with, RSM McGladrey also has 1,500 community bank clients. O’Rourke emphasized that despite the merger, O’Rourke, Sacher & Moulton will continue to function much as it did prior to the transaction. Its office locations will remain the same, and its partners and staff will continue in place (see chart this page.) RSM McGladrey has 500 Partners and 3,500 professional staff; OSM has 11 Partners and 65 professional staff. O’Rourke said H&R Block’s tax services may we useful for credit unions to offer to members in the future, and it already had one credit union client doing so over its Web site. “RSM McGladrey has been strong in the Midwest, with 100 office locations nationwide. Our focus has been on the west and east coasts, in Texas and adjoining states. We’re in places the other isn’t. We’re positioned now to serve bigger areas,” O’Rourke offered. “As CUSOs have expanded their authority and ways of making income, they’ve had to increasingly deal with unrelated business issues (UBI) and state taxation issues. These are challenging tax issues that could have painful tax consequences if handled incorrectly,” he said. “Credit unions too, though they’re tax-exempt, are faced with a myriad of challenging tax issues. They can find themselves in trouble if these issues aren’t handled correctly. These are the types of `sleeping dogs’ the IRS loves to poke at once in a while.” O’Rourke insisted the timing of the announcement of OSM’s merger with Career Connections and now its merger with RSM McGladrey was “purely coincidental, they were parallel strategic initiatives that were going on. It was not intended to be a one-two punch. As far as our merger with Career Connections goes, we always wanted to have a strong tie in with executive search. The California Credit Union League’s Career Connections represented that opportunity,” he said. Susan Lang, chief operating officer with O’Rourke Career Connections and formerly president/CEO of Career Connections said O’Rourke “gave full disclosure as we were going through the process of evaluating whether to enter into a merger agreement with them of their strategic plan with RSM McGladrey. It was all out on the table.” While the OSM/RSM McGladrey merger has no direct effect on O’Rourke Career Connections, David Chatfield, president/CEO, California Credit Union League said the company “will indirectly benefit from the merger because it gives us a better idea when job openings will occur and provides us more candidates to fill those openings that we otherwise wouldn’t have had.” As for OSM’s merger with RSM McGladrey, O’Rourke explained that OSM spent the better part of the last two years developing a strategic relationship with the company. “There’s been a terrific amount of consolidation going on in the CPA industry over the past four years. Our challenge was how to position ourselves for the future,” he said. “We wanted to see if RSM McGladrey could bring to the table what we were looking for and to be sure we could take their community bank expertise and tailor it for credit unions that are pursuing community charters. We wanted to make sure RSM McGladrey resonated with credit unions,” said O’Rourke. O’Rourke is convinced that by completing the merger, OSM has taken a giant step in creating the opportunity “to deliver much greater value to our credit union clients. This has positioned us for market growth and has created a powerhouse for delivering consulting services to credit unions.” – [email protected]

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