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.

While this move certainly seems enterprising, it becomes remarkably brave when you realize it’s taking place in an area of the Northwest that’s become a victim of its own success. Housing prices are skyrocketing, making the American Dream (and living in general) nearly impossible. Yet, with funding promises from several larger credit unions, this “David” is working with the “Goliaths” to defy the odds and become viable once again. We can learn a lot from credit unions like this. For starters:

  • If your credit union has lost its way due to a sponsor that no longer wants to work with you or SEGs who seem distant, a merger isn’t your only option. If you use a little creativity and look around your community, you’ll find niche markets that need a credit union to step in and fill a void. When you find a niche, it may be an excellent opportunity to repurpose your credit union.
  • Larger credit unions aren’t always the ravenous wolves they’re portrayed to be, the kind that hunt down smaller credit unions like yours. The cooperative spirit is playing out in this community like nowhere I have ever seen. It gives me hope that, unlike what we see happening here in South Carolina, not all big credit unions are selfish, merger-happy institutions preying on the not-even-cold-yet carcasses of struggling credit unions.

As you think beyond the current strategic planning season, it’s important to remember that no matter what your credit union is facing, there is hope. If you feel like you’re treading water in the community you serve or struggling to find acceptance and cooperation from your original sponsor or SEGs, it may be time to repurpose your credit union. Look at your surrounding community, identify the issues people are facing, and spend some time figuring out how your credit union could meet those needs.

If you think it’s time to call it a day and merge, I strongly urge you to press pause. Step back for a moment and consider what’s possible. If you and/or your board are exhausted and not up for the fight, I assure you there are people who are. If you’re being told that your sponsor or SEG no longer needs you, remember that there are people and groups in your community who do.

As you head into the board room to discuss what 2020 will look like for your credit union, we want to help you rediscover your passion, your purpose, and your plan for success. If you’re wondering why I’m so confident that our team can help you, that’s fair. Allow me to share a quick story. After completing a strategic planning session for a $40 million credit union in February, we received an email reporting “record loan growth, 24% higher than their next highest month.” Record loan growth sounds pretty good, doesn’t it? If it’s possible for this client, it’s possible for you.

Sometimes all it takes is a fresh perspective to hit refresh and rediscover success. Our team specializes in helping clients find that perspective. We’ve helped others. How can we help you?

shaking hands

From strat plans to rebrands, YMC President and CEO, Bo, is passionate about helping financial institutions come up with a winning formula. If you’re ready to go beyond the SWOT, you can email him at

Ready to take your marketing to the next level? Contact us for a strategic planning session.