By far, converting the respective data systems into one shared by all has been the most daunting. It helped that all 12 credit unions were using systems through Harland Financial Solutions Inc. DeWitt said the first two phases of the conversion took place in February and May and the final two are scheduled to be complete in 2008.

"Everything is on schedule, we're actively involved in the next phase of the data processor conversion," DeWitt assured.

The behind-the-scenes transition has been seamless to members, he added. Now, they can conduct transactions wherever there is a State Farm FCU branch even if they travel outside of a zone. State Farm Insurance has 12 zones in the United States and one in Canada. Before the merger, members were only allowed to conduct business in their respective zones. Over the years, the 12 credit unions have had to restructure to keep pace with region or zone realignments done by State Farm Insurance. There were once 26 State Farm FCUs but as a result of the zone restructures, that number dwindled to 12 credit unions and one in Canada, which remains independent of the merger.

Membership is open to State Farm Insurance employees, agents, retirees and family members. Dependents that move out on their own and are over the age of 25 are limited to share accounts and would not be able to make new loans, DeWitt said. The stipulations are consistent with State Farm Insurance's benefit programs. No attrition or department consolidation has taken place, DeWitt said, adding "to my knowledge, we didn't have any people who were upset with the merger and left."

"As a matter of fact, we did some focus groups and found that everyone was pleased with the consolidation," DeWitt recalled. "What we heard was [the merger] did not cause an interruption and they are pleased with having more access to locations."

Going back to the creation of that one set of policies and procedures, DeWitt said committees were established across the country prior to the merger approval to work on policies first. The process involved looking at what each of the 12 locations were doing, reviewing them in committee, running them past management and then making any needed adjustments. Procedures proved to be a more "mighty task," DeWitt said. The most streamlining occurred in the lending area. Since the credit union offers basic consumer loans, everyone had different versions. The committees and management came up with a standard, more detailed loan underwriting procedure, which established various levels of loan officers. DeWitt said they will continue to review for any "slight adjustments that might be more uniform and more easily operational for everyone across the country."

State Farm FCU pretty much offers a conservative product lineup: regular shares, new and used car loans, personal loans, lines of credit and in some locations, individual retirement accounts and certificates of deposit. Since the merger, there have been discussions about rolling out IRAs at all of the branches and possibly launching limited home banking services. In early 2007, the credit union partnered with CUNA Mutual Group to offer debt consolidation assistance. State Farm Insurance used to offer its credit life insurance to employees but after the company made some changes, DeWitt said the credit union went with an alternative. While it used to be a free service to employees through State Farm Insurance, average penetration is about 21% even though members now pay.

"Until we get on a single database, it's premature to talk about any new products," DeWitt emphasized.

Meanwhile, when news of the history-making merger broke, there was some speculation that the stage was being set to merge the newly-combined credit union with State Farm Bank. Formed in 1999, the State Farm Insurance

subsidiary offers a more extensive lineup including mortgages, credit cards, gift cards, money market accounts, and health savings accounts. The bank has more than 600,000 deposit accounts and more than $13.6 billion in assets according to Fraser Engerman, a spokesman for State Farm Insurance. Rumors were squashed by Engerman and DeWitt that the credit union and bank would merge. Nearly a year later, is that still the case?

"The answer is still the same," DeWitt said confirming no merger discussions have occurred and there are no plans to merge. In fact, the credit union and bank have been working together in a number of ways since the merger, he added. Engerman also confirmed again that there have been no discussions of a merger.

"From the insurance side, everything has gone very well and very seamless," Engerman said on the credit union merger. "We're entering into some new cooperations on a number of fronts."

All of State Farm FCU's portfolios are now managed through State Farm Bank's corporate investment department. The bank is also assisting the credit union with internal auditing. So far, roughly four branch audits have been conducted.

"The advantage has been a tremendous costs saver and being able to have the expertise within the company. It demonstrates the commitment from the company," DeWitt said. "Most credit unions our size have an internal audit department or have to outsource it."

State Farm FCU has also partnered with State Farm Bank's treasury services and creative services departments. Even though the two are on different data systems, State Farm Bank has been called on to help review upgrades and rollouts "to be sure what's coming in is efficient." DeWitt said at one point, the credit union had 20 State Farm Bank relationships, but now they're looking to consolidate down to four for more efficiency.

"We're a cashless operation, we just issue checks," DeWitt explained. "We have looked at locations where there is a [State Farm Bank] that could serve us more fully. We're hoping to come to four. So if a member doesn't go to their own financial institution, they can go to the bank we do business with."

The credit union's marketing and communication committee has worked hard over the past year to communicate to members about the changes. It created State Farm FCU's new logo to create an identity separate from State Farm Insurance, DeWitt said. A new quarterly newsletter and a revised intranet site are up and rolling. DeWitt said there have been some early discussions about possibly launching an Internet site. The newly-merged credit union had its first annual meeting in March but not in the usual way. A national phone conference call was set up for the 15-member board, management, staff and members.

It's been an extremely busy nine months, but DeWitt said progress has been steady.

"The board is doing well. We're always looking at governance and strengthening that piece," DeWitt said. "The commitment from staff has been tremendous. There's a lot going on and it's been a lot of work but we're all on the same page."

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