CEO Of One Would-Be Merger Partner Says Plan May Return 1 Day
Although the merger between Portland Teachers Credit Union and Oregon Community Credit Union has been called off, OCCU CEO Gordon Hoerauf, said the deal may take place in the future.
But at present, he said, there are just too many issues to resolve. If completed, it would have been one of the largest CU mergers in history.
"We were two different types of operations. We've both been in business a number of years and do things differently," Hoerauf told The Credit Union Journal. "For example, we are risk-based lending, they are not. That is an operational issue, and it is a philosophical issue, also."
"Eventually, both boards saw putting the two institutions together was more difficult than originally thought, so we decided not to go to the altar," he added.
Hoerauf said the biggest lesson to be learned from the unsuccessful merger attempt is to have the boards meet more frequently so the sticky issues come up earlier in the process.
Prior to its conversion to a community charter, Oregon Community CU's field of membership included state employees and faculty, staff, students, and alumni at the University of Oregon in Eugene (it was formerly U Lane O Credit Union). After charter conversion, its FOM became anyone living or working in the 10 western Oregon counties of Benton, Clackamas, Columbia, Lane, Linn, Marion, Multnomah, Washington and Yamhill-which combined contain approximately 70% of the state's population. OCCU's potential membership expanded from 150,000 to 2.4 million, including 1.9 million in the Portland area, but it had no brick-and-mortar presence there.
When the two CU's announced in November 2003 they were eyeing a potential merger, Hoerauf cited the need to penetrate the Portland market as the major incentive to the deal. This week, he reiterated the importance of expanding into the booming city.
"I'm sure there are a lot of disappointed members, especially those who thought the merger meant we would have branches in Portland. With 1.9 million of our potential 2.4 million members there, we need to be in Portland. And we're committed to being there," he said. "We will do it, it is just a question of how fast we can do it."
Hoerauf said Oregon Community CU is active in the Credit Union Direct Lending (CUDL) network, and gets half of its CUDL volume from the Portland/Salem area.
As for the merger with Portland Teachers CU, Hoerauf left the door open.
"I don't know what will happen in the future. I think we are still a good fit, but it is going to take a lot more time than we thought."