FOREST GROVE, Ore. — A merger of equals is a different concept than two large credit union merging, said David Bartoo, CEO of Merger Solutions Group. For those who talk trends, he said, big mergers are where the action is.

“The notion that large mergers of equals is a current trend is difficult to quantify based on of the two proposed so far in 2008,” Bartoo said. “But the idea of more large credit unions being merged could be a reality.”

Bartoo said the $100 million and up crowd is the most active segment of his merger consultancy business these days. Performance trends are declining among institutions once considered large enough to enjoy economies of scale, particularly community credit unions with broad fields of membership in competitive Southern California. Volunteers and managers experiencing stagnant or negative membership growth are exercising all of their options, he said, including playing the painful role of merged institution.

“If you had 100 members yesterday, and only have 95 members today, that's 5% fewer you can loan to, which prevents you from increasing ROA, which prevents you from growing the credit union, which results in even fewer members,” Bartoo said, adding, “it's a wicked cycle.”