The $914 million University of Iowa Community Credit Union, thestate's second largest, is making its mark this month in furtherfield of membership expansion by merging with the $46 million Bestof Iowa Community CU of Hiawatha.

The consolidation of the suburban Cedar Rapids credit union, inthe talking stage since last September, underscores UICCU'semphasis on statewide growth, according to UICCU. It added that ithas turned aside-at least for now-any notion of extending anout-of-state footprint following queries from the NCUA aboutbidding on struggling credit unions in the sand states.

“Buying troubled assets is not our cup of tea,” said JeffDisterhoft, president CEO of the healthy Iowa City credit union inrejecting potential NCUA entreaties to become a bidder on Nevada,California, Arizona or Florida credit unions.

For Best of Iowa, the merger with UICCU underlines what itsveteran CEO, Stanley Younce, said is a problem for medium-sizecredit unions to compete in costly media markets like Cedar Rapidswhere larger credit unions have their eye on growth.

While the merger with UICCU is a positive step for his creditunion, which is also healthy and well- capitalized, in providingadded services, it does underscore “what may be a trend elsewhere,where the very smallest maintain a niche, but medium-size creditunions find it far harder to compete,” said Younce.

Best of Iowa did entertain offers from other credit unions tomerge but chose UICCU as the best fit, said Younce.

Disterhoft of UICCU, with ROA of 1.5%, said the addition of Bestof Iowa fits into a long-range plan of adding branches in metroCedar Rapids.

The UICCU application for Best of Iowa is currently before theNCUA and state regulators, with a vote by members slated nextmonth, said Disterhoft. Final computer conversion and name changeis due in July.

“The University of Iowa has a pretty good name in the state, andso I don't think they will be changing it,” said Younce, adding,“they went through that before and it didn't work.”

He was referring to the 2007 member opposition and communityuproar over a planned name change for UICCU to become Optiva CreditUnion. Cancellation of Optiva came after the credit union had spentfunds for new signage and marketing materials.

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