WARRENVILLE, Ill. -
Members United, a $10.9-billion corporate here, said the merger will expand its presence in the New England states. The $246-million Central CU Fund will retain its office in Auburn, Mass., as well as its member contact staff after it is absorbed in the merger.
Jim Van Arsdale, CEO of Central Fund, told Credit Union Journal he will be a senior vice president after the merger and will direct the Massachusetts market for Members United. He said there will be an emphasis on bringing in deposit and loan activity credit unions in the region currently are doing outside the corporate network.
For several years, Central Fund had been seriously evaluating its position in the marketplace, its product suite and its ability to service its member CUs, Van Arsdale explained. "To that end, even before I began my duties as president and CEO in April 2004, our board proposed legislation in the state senate to allow us to invest in CUSOs or merge."
When the bill neared passage, Central Fund began conversations with several corporate CUs in an attempt to weigh which would be the best fit for its members, Van Arsdale continued. He said Central Fund was looking for a strategic partnership, not necessarily a merger. After narrowing its focus, Central Fund had conversations with a small number of corporates and decided a merger with Members United would be the best option, he recalled.
"Everything fit, and it became a compelling value proposition," said Van Arsdale. "Members United is very committed to this marketplace. We will have improved ability to service our members. The loan rates they charge are more competitive than we are able to charge at this point.
"Members United has a proven ability to serve smaller credit unions, which we traditionally service. That resonated with our board of directors," he added.
Members United is the product of a merger between Mid-States and Albany, N.Y.-based Empire Corporate Credit Union. Vic Vrigian, SVP of marketing and member service for Members United, noted the Mid-States/Empire merger meant Members United already was the home corporate for CUs in Rhode Island, which gave it a foothold in New England.
"The ability to do this merger helps us specifically in positioning, and in going after business that is held outside the corporate network," he said. "Empire Corporate was headquartered in New York. Massachusetts is a contiguous market with New York, and to us, a natural progression of our market. We look at mergers to make sure it is in the best interests of the members of both institutions. If that is the case, it extends the product line of the merger partner."
The proposed merger must be approved by Central Fund members. The corporate will host six town hall meetings throughout Massachusetts. Central Fund said it has mailed information about the meetings to each of its members, and will discuss "merger plans and benefits" in depth.
A special meeting for a member vote will be held in mid-June, Van Arsdale said. If approved by Central Fund's members, the merger then must be approved by the Massachusetts Division of Banking and NCUA. Van Arsdale said he is very optimistic approval will be granted, as both institutions are working with regulators. "The town hall meetings will be an opportunity for our members to ask any questions they have. If we do our jobs well, things will go smoothly."
Asked if the merger places Members United's Massachusetts operations in competition with EasCorp, headquartered in Woburn, Mass., Van Arsdale said Central Fund already has members who also belong to EasCorp, as well as other corporates, since all have national charters.
"We've been here 75 years this year. Our goal is not to target another corporate credit union," he said. "Our focus will be on serving our members and targeting those credit unions doing business with broker dealers, the Federal Home Loan Bank or large commercial banks."
Added Vrigian: "Members United cooperates within the industry, and we compete with other corporates. Members United is involved in WOCCU and CUNA, as well as all of the state leagues where our members are located. We already are competing in the Massachusetts market."
Other pending corporate mergers include Southwest Corporate and Northwest Corporate along with WesCorp and SunCorp.
