DENVER — Drawing from its own merger experience and linked up with a Denver consultant, the $900 million Westerra Credit Union announced last week it has completed work on a specialized "merger kit" aimed at guiding CUs across the U.S. in planning mergers.
The kit or manual, which runs 1,000 pages and is described as an "electronic encyclopedia" of the do's and don'ts of CU merging, is being offered to CUs at $5,000 per set.
"We've already sold 10 of the kits and I expect over the next year we'll sell 100," forecast C. Alan Peppers, president/CEO of the Denver CU, which contends management of his CU joined by a partnering firm, Nice Enterprises Inc. has much to offer on merger strategy and tactics.
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Considering "mergers are the new reality for credit unions," Westerra together with Nice felt it could share valuable information with other CUs based, in particular, on the two successful Denver area consolidations it completed over the last two years, said Peppers.
The kit, he said, contains "a toolbox of model documents and strategy plans that can be useful to CEOs, boards and senior management teams" as they move ahead with mergers whether pushed by regulators or those "of equals."
"The merger kit is a one-of-a-kind resource that will lead credit unions successfully through every step of a win-win merger," declared Ron Nice, pres-
ident/CEO of the Denver-based family firm.
Nice said his firm with 750 client CUs has handled some 25 mergers over the years with the prospects of many more coming soon based on current trends.
"Every credit union that uses this kit will save tens of thousands of dollars and hundreds of man hours in legal work and strategic planning," forecast Peppers.
The merger impetus comes, said Peppers, as CU managements realize they can indeed "expand with branches, build capital, attract and retain quality staff and enhance buying power." On top of that, mergers provide additional products and services for the newly merged, he said.
The Westerra CEO stressed that the merger kit "will not be a moneymaker" for his CU, but is being put on the market as a helpful tool.
Peppers said in searching for tools to help with its mergers, Westerra found "there was a real void for plans, contracts, documents, forms, presentations and models." The kit contains data on such topics as "aligning cultures, communicating benefits to members and staff for a successful member vote" as well as steps to gain regulatory approval and to integrate systems.
The idea for the "interactive" merger kit follows work done on the topic through the University of Denver business school, which led strategy sessions with the
Nice team.
Nice consultants then helped develop Westerra's merger strategy starting in 2005 and leading to the consolidation of Safeway Rocky Mountain Credit Union and later Gateway Credit Union of suburban Aurora. Westerra subsequently changed its name from DPS Credit Union.
Asked about current merger prospects in Colorado in light of NCUA's July conservatorship of Norlarco Credit Union of Fort Collins, Peppers said Westerra would pass for now on bidding given the poor condition of the $334 million Norlarco, which most recently posted $56 million in delinquent loans.
"We have the capacity in size but we would not imperil our capital with the prospect of very high losses," said Peppers describing a threshold that would be surpassed if Westerra were to acquire Norlarco.
Peppers acknowledged, however, there may be other CUs eager to bid on Norlarco "because of an attractive field of membership" in light of its northern Colorado location in a prosperous college town.
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