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CHICAGO – GRFI/The Frerichs Group, a credit union consulting firm specializing in capital strategies along with branch design and site selection, is hooking up with a Colorado shop to offer “merger matchmaking” services. The Chicago-based GRFI/ Frerichs said it is joining with Umholtz Strategic Planning & Consulting Services of Castle Rock to offer merger consulting advice, assisting both big and small CUs in identifying potential merger partners and assessing market factors. George Frerichs, founder of the 40-employee firm started in 1971, said the service linkup with Marvin Umholtz, who heads up his own suburban Denver firm, brings together Frerichs’ practical skills on retail delivery and “Marvin’s contact background and industry knowledge.” Umholtz is a former staff executive with the Kansas and Michigan Credit Union Leagues and is known more recently for his association with the Coalition for Credit Union Charter Options as its membership director. Both Frerichs and Umholtz stressed the matchmaking service will have no part in conversions, an area in which the Coalition has lobbied on the side of CUs seeking to switch charters to a mutual savings bank On the contrary, “our goal will be to help credit unions remain viable and maintain market share,” said Frerichs. Providing merger advice, said Frerichs, has become a prime issue for many CUs across the U.S. as they face mounting pressure on capital and asset growth. The merger service, said a news release, will serve to “strike a balance between growth-focused business strategies and the `people’ issues that often surface when two credit union cultures combine.” Frerichs said the Umholtz/ Frerichs service is being offered in large part in response to plans by the Financial Accounting Standards Board to adopt the purchase method of accounting for business combinations by non-profits. “We believe the rate of mergers will double over the next 22 months,” he forecast adding that “merger-seeking credit unions have an incentive to act now while the current more favorable rules are still in effect.” The matchmaking service will assess the contributions of potential partners and help negotiate favorable terms, said the release. The service will also look at branch networks of merging CUs and “cost justify for reconfiguration, relocation, consolidation or closure.” “In addition to the pending FASB rule, we are also responding to credit union leaders’ increased recognition that economies of scale have become strategically compelling,” said Umholtz. Pressure on earnings margins and the “anticipated flood of retiring CEOs are additional factors driving increased mergers.” As for conversions, Umholtz said his linkup with Frerichs “has no direct connection to my activities on behalf of the Coalition for Credit Union Charter Options.” “Frankly, under the current circumstances, I expect only a few credit unions per year to convert to a mutual savings bank charter,” forecast Umholtz. “On the other hand, I anticipate as many as 700 hundred CUs seeking mergers per year.” The Frerichs firm, with 150 CU clients, includes an architectural division as well as units dealing with real estate, market assessment and deregulation. Frerichs, a former publisher of Chicago Magazine, has been an instructor at schools and seminars of CUES and CUNA. [email protected]

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