PORTLAND, Ore. -
The two corporates were still in the process of putting together their merger application for NCUA's approval at press time. Once NCUA has OKd it, the proposed merger will go to a vote of the $900-million Northwest Corporate's membership.
Leading up to that vote, Northwest will host a number of meetings to give its members a chance to learn more about the merger. The tentative timetable calls for the vote to take place some time in October or November, with the merger consummated by the end of the year.
The plan calls for the merged entity to retain the Southwest name and maintaining Northwest's current office and staff as a branch office.
For both corporates, it's a second attempt at making a trip to the alter. Earlier, Southwest had attempted to merge with Tallahassee, Fla.-based Southeast Corporate FCU. But even as those talks were taking place, Northwest and Southwest were also already in merger discussions, with the potential for all three of the corporates to be rolled into one.
Because the Southwest-Southeast merger had originally been prompted by Southwest's search for a CEO to replace Francis Lee, who left to take the top spot at U.S. Central Corporate, the Northwest combination was put on the back-burner until the Southwest-Southeast union was settled, according to both Northwest CEO Kathy Garner and Southwest CEO John Cassidy.
Once the merger with Southeast fell through and Cassidy was selected as Southwest's new CEO, Northwest and Southwest resumed merger talks, they said. Northwest has been in the market for a merger partner for some time, Garner explained. "In looking at the long-term sustainability of innovative products, good pricing and serving our members, the board felt we needed a partner," she told Credit Union Journal. "There is nothing we need to fix today, but we are looking into the future and looking at the compliance costs and back-office infrastructure and wanted to find a strong partner."
That search has included a number of corporates across the U.S., most notably Wescorp, which is geographically closer to Northwest than is Southwest. But where mergers in the past tended to be geographically driven, that is changing.
"Being contiguous just isn't all that important anymore. Because of technology, today you can do just about anything from anywhere, so the geography didn't have to be an issue," Garner offered.
And it won't be the first time that corporates have hopscotched geography for merger partners. What is now Members United, for example, was formerly Empire Corporate in New York and Mid-States Corporate in Illinois.
"Of course, Texas is kind of foreign to us here in the Pacific Northwest," Garner quipped, "but what we were looking for was a strong back-office and robust infrastructure, and Southwest just kept popping to the top. This was about finding the best partner, not the closest."
With members in 40 states, Southwest is happy to be gaining an office in Oregon, but there's more to it than that, Cassidy said.
"This is an area of the country where we could have a strong presence," he related. "But Northwest also has an excellent mix of products and services, and especially the member business services CUSO."
In a unique move designed to show the corporate's continued commitment to both Washington and Oregon, Northwest is placing $1 million in the state credit union foundations in both Washington and Oregon. "This will serve as lasting evidence that we are and always will be committed to the interest of the credit unions in these states," said Linda Wheeler, chairwoman of Northwest Corporate.
