ARVADA, Colo. and OMAHA, Neb. – With the ink barely dry on the Empire Corporate/CorpStar FCU merger, another corporate marriage is in the works. In a joint board meeting, the boards of the $2.3 billion SunCorp Corporate CU and the $188 million Nebraska Corporate Central FCU have agreed to merge. SunCorp Corporate announced the plans to its member credit unions during its annual meeting held May 21 in Englewood, Colorado. If the deal goes through, the corporate network would then consist of 33 corporates, down from 43 just seven years ago. For SunCorp this would be its second merger in a short timeframe. Its merger with Rocky Mountain Corporate, Salt Lake City, Utah, closed in 2001. This would be the third merger in SunCorp's history. It was actually part of the network's very first merger when it merged with the Wyoming League Corporate back in 1978. "Our vision for the future is to become a regional corporate, serving the Rocky Mountain/Great Plains region. We don't use a competitive model. We don't try to win over members from other corporates," said Eric Kenealy, president/CEO of SunCorp. Nebraska Corporate has 82 member credit unions. Kenealy said SunCorp will be able to provide them with higher quality and a wider variety of investment products than they've been getting from Nebraska Corporate. But SunCorp is also getting some product offerings that it doesn't have, said Kenealy. While Nebraska Corporate is one of the smallest corporates in the nation, it has one of the most potent entrepreneurial approaches. It owns two thriving CUSOs. One is Credit Union Enterprises, which has experienced recent success with its Member Relationship Product, CUE121. It also owns CUSO LLC, a mortgage processing CUSO. Kenealy said the corporate's CUSO success, especially with MRM, was an attraction for SunCorp. "There are a number of corporates offering its (Credit Union Enterprises') MRM services to their members. We're going to definitely continue to support their CUSOs," said Kenealy. According to Nancy O'Brien, president of Credit Union Enterprises, the CUSO only launched its MRM product in February and already has marketing agreements with Minnesota Corporate FCU and CorpStar (merging with Empire), with another deal imminent with a Midwest corporate. "We have more informal marketing agreements with Iowa and Arizona (corporates)," said O'Brien. Nebraska Corporate also has a 20% stake in Corporate Access, LLC, a CUSO owned by five corporates, and is an owner of CNBS. Nebraska Corporate Central FCU President/CEO Mike Keim said the corporate's active CUSO businesses demonstrate that a small corporate can be aggressive with all kinds of products, but size and economies of scale are needed on the investment side. "I think we've been in the forefront of corporates as far as the utilization of CUSOs to offer fairly unique products, but in the last few months we have not been able to pay as competitive rates as we historically have. That's quite frankly because of economies of scale," said Keim. At a strategic planning session a few years back, Nebraska Corporate identified diversification of revenue streams as a primary goal. Keim said the corporate looked at its operations in two ways: one being the core products all corporates have, and the other being unique products that could be delivered nationally. It felt its strength would be with the latter. It worked. As an example, he said 11% of the corporate's net income comes from its mortgage CUSO. This isn't the first time Nebraska Corporate has considered a merger. "Over the last half a dozen years or so, six to eight corporates have expressed interest in doing this. There's never been the right cultural or product fit. SunCorp's approach is unique in that they believe completely in maintaining a local presence, local personnel and leaving products and services alone except where they can be enhanced," said Keim. "We have been assured by SunCorp's board and senior management staff that there will continue to be an Omaha office." In fact SunCorp was almost too hands off with Rocky Mountain Corporate, which it acquired in 2001. For a few months after the merger it even allowed Rocky Mountain to maintain its name and branding material in its region, but eventually pulled the plug because of hefty legal and regulation costs. Kenealy said when this merger closes, Nebraska Corporate will immediately be converted to SunCorp. Nebraska Corporate's headquarters in Omaha will be kept as a regional member service center. All seven of the corporate's employees will keep their jobs in some capacity. Keim will become senior vice president heading SunCorp's Nebraska operations. Keim said this deal was all about getting better products and services to Nebraska credit unions. "We're always looking out for what's in the best interest for Nebraska credit unions. Our FOM is national, but quite frankly we don't have any member credit unions outside of Nebraska. This is an excellent opportunity for our members. I hope that there will be unanimous approval for this," said Keim. Keim said the corporate wants to begin the voting process in July, and have it concluded by August 22 so it can release the results at its annual meeting to be held August 23. Though the assets aren't large, Kenealy said gaining size always helps."It will help with economies of scale, and it diversifies our membership base. By serving 537 credit unions, we'll have a larger membership base to diversify the costs of our operations and pay better dividends," said Kenealy. [email protected]