The head of one of Atlanta’s largest credit unions, Lin Hodges of the $1.1 billion Associated Credit Union, takes a dim view of “slash and burn” tactics when it comes to CU merging.

Indeed, Hodges, Associated’s president/CEO, voiced strong support last week for the “division” concept or independent CU unit, a business model the CU has carefully crafted since 2009 for a merged Augusta CU.

“We’ve witnessed too many of these mergers in which member loyalty is diminished, the key asset–employees–are let go and money wasted for brand awareness with poor results,” observed Hodges.

Specifically, Hodges is high on results stemming from ACU’s merger of the $59 million CSRA FCU in November 2009 which was converted into a division of ACU.

When CSRA was merged, it “was projected to lose money in the first year, break even in the second and become profitable by the third. And the actual results show profitability in the first year, and 13% loan growth in the past year,” boasted Hodges.

Moreover, ACU, based in the Atlanta suburb of Norcross, “absorbed CSRA compliance, IT and support expenses, reducing its operating cost by 21%,” said Hodges.

In discussing his division rationale, Hodges said the 12,000-member CSRA with four branches has been operated as an autonomous unit “having its own identity,” thus protecting the brand without a needless and costly awareness campaign to be conducted by ACU.

ACU has managed to gain a strong foothold in the Augusta market “and the members are happy” and the transition to move ACU’s members to the CSRA division has been seamless.

Hodges, who also is chairman of Georgia Corporate FCU the soon-to-be-parent for the consolidated Southwest Corporate CU of Dallas, stressed that not every merger can succeed using the division model, “but the metrics were just right with CSRA because it was well- managed.” Future ACU mergers, if they surface, may not work the same, he said.

In commending the CSRA management, Hodges had high praise for its former CEO, Charm McCall, who moved to Atlanta in 2010 to create Associated CU’s new member loyalty department, where she is a vice president.

Regarding mergers in general, Hodges suggested that managers at both big and large CUs need to be cautious or at least wary about “receiving that instant payoff to the bottom line” from a merger. They can be quickly disappointed, he concluded.