OSHKOSH, Wis. — An unusual merger strategy here has been a roaring success as well as a learning experience for all parties involved.
CitizensFirst CU was part of a three-way merger earlier this year with Lakeview CU and Best Advantage CU.
But what made the process unique was that all three institutions were healthy--none of them needed the merger to survive.
"Overall it was an incredible success," said CEO Kevin Ralofsky. "There's always things that you miss or could've done better or differently, but the things that we've tried to change or rework through the process were pretty minimal. The impact to the teams was great from the perspective of merging, but the way the cultures are melding together has been really strong, really promising."
The No. 1 area where Ralofsky said the process could have been improved was communication "across all verticals in the organization." He was quick to point out that the quality of the communication "was spot-on," but more of it would have helped to get buy-in better across all three merging credit unions.
"We found there were times when certain groups of key individuals weren't what we were calling 'all-in,' and it just turned out to be a lot of times a lack of communication or a lack of time spent, because we were all going in several different ways," he recalled.
The communication issues applied to the membership, too.
"No matter how much you communicate to the members, some of them didn't even know we merged, even though we sent out as many pieces of information, whether it was digital or paper or visually when you walk into the branch," said Ralofsky. "No matter how many times you tell them your account number will be the same but will also have a suffix or prefix on the front or end, they don't realize that until it affects them positively or negatively."
Lending at the combined organization is up by 9%, and Ralofsky said that some of the CUs that merged in were not expecting those strong numbers. "Some projected much lower growth than that," he said. "It's partly because of the joint marketing effort that we have in shared promotions, focusing on areas that typically weren't large growth areas in the past, and putting a lot of effort into digital marketing and target marketing."
ROA is also trending at 1%, and two of the three credit unions had been trending well below that prior to the merger.
While all three institutions are operating as one, with fully integrated staffs and a combined board, they still work off of separate core processing systems.
Merging to the same credit/debit provider is also in the works for early 2015. All of those should save the credit union $1.7 million over five years, "which is fantastic — and it can only get better," said Ralofsky.
The chief executive emphasized that though the merger was a success, it wasn't without its challenges.
"It would've been a lot faster to just say 'CitizensFirst, your board is in; others, your board is out. Here's the executives that comprise the business and here's the team and CitizensFirst will run it,'" he explained. "We didn't do it that way. We looked at every single facet of the business, looked at our business... and spent a lot of time looking at are these people good for the organization, are the good for the culture, are they promotable?"
He said that process required a lot of hand-holding and reassurance for team members and "that's the hard way to do it — but I think it's the right way."
