Published in: CU Business

After years of assisting credit unions and banks navigate the merger & acquisition process, I’ve learned many valuable lessons. One of the most important is to ask the tough questions early in the process. A real-life example of this happened years ago, when I was called in to assist two credit unions that had already been working together on a merger for months. One of the first questions I asked the two then-CEOs was who would remain at the helm post-merger. They both raised their hands. After months of preparations on both sides, the merger never happened.

Your institution can avoid those types of pitfalls by enlisting the right assistance to navigate the process and discussing the negotiable and non-negotiable aspects of any potential merger or collaboration beforehand. Everyone wants to be the surviving institution. However, what that means to individuals, executive teams and boards may differ.

Why Consider Mergers Now?

Put simply, scale matters. Since 1990, 50% of credit unions have disappeared. Yet, membership has increased by 100%. There are simply a smaller number of credit unions serving more members – and competing with other, larger financial institutions via community charters. What we’re seeing in today’s environment is not a rush of institutions merging due to financial insolvency. Rather, forward-looking financial institutions are considering the best ways to remain relevant and sustainable in the future.

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