Considering a merger? Do this first!

I recently had the pleasure of speaking with the CEO of a $20 million credit union. After learning about the results they’re seeing, I exclaimed, “You’re doing some amazing things for a credit union your size!” Wanting to know more about what led to their recent success, I asked for some background on the credit union. The CEO shared that it started as a single-sponsor credit union several decades ago. Then, after an extended period of business as usual, the sponsor suddenly declared it no longer had the need or desire to support the credit union.

Taken aback, the credit union board chair responded, “I’ll be damned if this credit union will go down on my watch!” Despite seemingly impossible odds, the board decided to dig in and get serious about securing the longevity of the credit union. “If they don’t need us,” the board chair stated, “I know there are others that do.”

In a situation like the one described above, most boards and CEOs would have started looking for merger opportunities. In an increasingly competitive economy, that strategy makes sense. But as this inspiring CEO and his credit union have demonstrated, a merger isn’t always the best idea. Sometimes a merger is just the easy way out. Now, two years into his plan, the CEO and his board are working with several larger credit unions to “repurpose” this credit union to serve a new generation – one that is largely unbanked.


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