The Urge to Merge

Many smaller credit unions consider mergers as a way to add value for their members by providing access to high-cost remote delivery channels and an expanded product line. As the CEOs of smaller credit unions near retirement age, they are turning to mergers as an option not simply to find management replacements, but to leverage their capital and cover their costs of technology investment, marketing expenses and member losses. Meanwhile, medium and large CUs seek to increase their scale of new markets, members, branches and, preferably, nondiluting capital costs. Member demands for convenience and accessibility, competitive pressures, technological and regulatory changes, and the current economic cycle are coming together like a “perfect storm” for mergers. Mergers provide continuing CUs with instant members, facilities, trained staff and market awareness.

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