One credit union that is living a life different from the one its leaders originally planned is Maine Harvest Federal Credit Union ($2.7 million, Unity, Maine). One of 2019's de novo credit unions, Maine Harvest opened after six years of fundraising and other prep work to serve a niche membership of small-scale Maine farmers and other food producers with local distribution models and sustainable farming techniques. Last month, the credit union announced it was merging into the $375 million, Bath, Maine-based Five County Credit Union – a decision made after 2020's pandemic-induced economic crisis caused a reduction in the amount of the credit union's investment income, on which it was partially relying. Following the merger, which is still subject to member and regulator approval, Maine Harvest will become a department of Five County, continuing its specialty of making agricultural loans to small, local farmers and food producers.

Merging into another organization just a few years after opening may not be the ideal outcome for a new business, but Maine Harvest's leaders acknowledged that the merger is happening due to economic conditions outside of their control ("We don't get a prize for timing," Maine Harvest President/CEO Scott Budde said when CU Times first reported on the merger). And, instead of dwelling on what the credit union might look like had it been able to continue functioning and growing on its own, its leaders are grateful for the opportunity to do things they could only do as a result of becoming a part of a larger institution. As a division of Five County, the former Maine Harvest will be able to originate larger loans and introduce new products and services such as lines of credit, business checking accounts, and personal and business online banking.

"One of the things we're looking forward to with the merger is that it will free us up to focus on our lending as opposed to day-to-day management of a credit union, which is tough for a small credit union," Budde said in a subsequent interview.

Maine Harvest entered the merger process with a $1 million loan portfolio and 78 members; post-merger, it will have the opportunity to increase loan sizes from its previous cap of $225,000 to between $500,000 and $1 million, Budde said. And Five County's leadership is enthusiastic about its upcoming foray into farm lending and the positive impact it will make on the local community and economy.

"We are very excited to work with all of the Maine Harvest folks to continue on the mission of serving small, local farms and food businesses," Five County President/CEO Julie A. Marquis said. "I think all communities, businesses, members and families have been affected by economic developments and stressors, and we just want to be here to help."

The leaders of the soon-to-be-merged credit union are also owning their individuality and the fact that they are committed to serving a market that is untouched by the majority of credit unions. According to a CU Times analysis, last year, credit union agricultural loans accounted for just 2% of the $37.1 billion in total commercial real estate loans produced in 2021, and just 10 credit unions were responsible for 59% of the movement's $635.4 million in farm loan production last year. The U.S. agricultural industry mainly obtains its financing through the Farm Credit System, a U.S. Department of Agriculture program, as well as larger banks (fun fact: Just as banks have long attacked credit unions over their tax-exempt status, they've also been at war with Farm Credit, arguing that the system has taken advantage of its status as a government-sponsored enterprise to unfairly compete with banks for agricultural loans). This environment has left credit unions with few opportunities to enter the agricultural banking space, but perhaps more importantly, lending to large agricultural businesses is too big a risk for most credit unions to take on due to factors such as the fluctuating value of food products, as Budde explained.

However, by exclusively targeting small yet diversified, locally-oriented farmers and food companies, to whom lending is more feasible for a small institution, Maine Harvest – soon to be Five County – has found a unique niche that, as Marquis mentioned, is also helping to support a community that has felt the impacts of inflation and is in need of financial services.

"It's a privilege to be able to do this type of lending," Budde said, adding, "If you're a small farm in a place like Maine, you don't have as many financing options as you would if you're a giant farm in the Midwest or even just a small business. So I think they really appreciate having a financial institution that wants to work with them, values what they're doing and understands their needs."

There are two morals to this story: First, whether you want to call it opening a window when a door closes, seeing the glass as half-full or looking for the cloud's silver lining, things aren't always so bad when life thrusts you in an unexpected direction. Second, mirroring what your peers are doing is never a good strategy. Find your niche and hone it, whether it's immersing yourself in a quirky hobby or providing a needed service to a specialized market. The outcome could be forms of internal growth and outward impact that you never imagined before but also couldn't imagine life without now.

Natasha Chilingerian

Natasha Chilingerian is executive editor for CU Times. She can be reached at [email protected].