Pacific Corporate Federal Credit Union and Western Corporate unveiled plans to merge, following a trend of consolidations in the corporate credit union network that has seen the number of corporates shrink from 45 in 1993 down to 33 in 2003.
The marriage awaits approval from the NCUA-a process that could take up to 120 days-followed by a vote of PacCorp's member credit unions. At press time, NCUA said it had not received the corporates' merger application.
Honolulu-based PacCorp serves 101 CUs in the Hawaiian Islands and Guam, and has $567 million in assets. Headquartered in San Dimas, Calif., Wescorp has 988 member CUs in 33 states, plus Guam, and has more than $24 billion in assets.
If the merger is approved, WesCorp will retain PacCorp's staff of 12 persons and a permanent office here, the corporates said.
In addition, PacCorp CEO Rand Yamasaki would be appointed WesCorp's senior vice president and would oversee the Hawaii office. WesCorp would create an additional board director seat, and would form an advisory committee to provide PacCorp officials with a "direct participatory role" in WesCorp governance.
Yamasaki told The Credit Union Journal the two corporate CUs had discussed a possible merger in the past. However, nothing came of those talks until November 2002, when Bob Siravo, WesCorp's president and CEO, approached PacCorp after WesCorp's Hawaii/Guam regional manager resigned.
"WesCorp emphasized working together as a family, which is consistent with Hawaiian values," said Yamasaki. "We have a strong feeling of 'ohana,' which means family. We saw WesCorp's new culture as being consistent with that."
According to Yamasaki, PacCorp does not fear a loss of local control, because, he said, it would operate somewhat autonomously. "Despite being a regional office of WesCorp, we still will be able to offer our credit unions the special services and training we have in the past."
PacCorp does not have any other strategic mergers in the works, he added. Yamasaki said the proposed merger with WesCorp made sense, given the number of regional corporate CU consolidations that have occurred in the past 10 years.
"We are providing to our member credit unions the best of both corporates from one strong entity," he said. "We will hold an informational meeting for our member credit unions in August, and the theme we will stress is, 'PacCorp and WesCorp together-a family united for your success.'"
James Updike, WesCorp's chairman of the board, said in a prepared statement, "The combined business from PacCorp and WesCorp will ensure that Hawaii and Guam credit unions benefit from a strong local corporate credit union presence with the necessary economies of scale to be able to create customized investment and payment system solutions tailored to meet the unique needs of the local market. Combining the business of two major players is the best way to optimize the economic viability and success of Hawaii and Guam credit unions."
Yamasaki said he does not envision the NCUA denying approval for the merger.
"Both credit unions are healthy, so there are no safety and soundness issues," he declared.