Finding the best partners, negotiating terms, completing the required regulatory paperwork, due diligence, vendor notification and member disclosures are all part of the process.  Most importantly, a merger without a strong communication plan involving employees and members could be a deal breaker, experts warn.

"There are a lot of reasons that credit unions are merging these days and it's not only so they can survive," said David Bennett, director of public relations for the Northwest Credit Union Association, which has offices in Beaverton, Ore., and Federal Way, Wash. "CEO's are retiring left and right and the cost of a good CEO is quite expensive. The economy is certainly behind the decision to merge for many, but there are a lot of different reasons behind the amount of mergers these days."

According to Bennett, there were 65 mergers in the state of Washington between 2010 and 2011.

"When people hear the word 'merger,' they think of layoffs," said Shari Campbell, vice president of JayRay, a Tacoma, Wash.-based company that specializes in branding, advertising and strategic communications.

"They don't want to see jobs lost, especially in small towns with a tight-knit culture when they think a merger means that the same woman who has greeted them for years might lose her job," Campbell said. "Communication is a big part of a merger and credit unions need to do a better job of explaining and reassuring the public that things will change for the better."

JayRay has been involved in three credit union mergers this year, according to Campbell. In 2012, the firm led the $420 million Montana 1st Credit Union in Missoula, Mont., through a campaign that resulted in a successful second vote by members to merge with the $2 million Horizon Credit Union in Spokane, Wash., Campbell said.

"The merger was about bringing additional value to the membership and opportunities to grow Montana 1st to better serve our entire field of membership. And, a strategic partnership with Horizon Credit Union does just that," said Chris Sisco, CEO of the $64 million Montana 1st who will retire next year but will continue as regional vice president of corporate integration. "The board and senior management spent a considerable amount of time looking at the opportunities for more member access and more services being provided by the same friendly faces with the name the members knew and trust, Montana 1st."

When the news about a possible merger began circulating, Montana 1st members were reluctant. After a small voter turnout last December that resulted in a 'no' vote, the credit union planned to give members a second chance. JayRay said it was brought in to guide communications efforts and turn the second vote around.

A campaign with the theme "Better for you, better for Montana," featured members, employees and community ambassadors explaining why they supported the merger and planned to vote yes. The message was delivered via outdoor, print, direct mail, Web and in Montana 1st branches.

With the merger making weekly headlines in the local paper, a strategic media relations plan was also important to even out the handful of negative voices that were making a big presence, according to Campbell. JayRay led the credit union through a strategy that resulted in more balanced coverage including positive editorials and letters to the editor, she added. The result was a 56% vote in favor of merging.

Montana 1st will retain its name and employees. At press time, the merger was expected to be finalized by the end of September.

People issues aside, a merger is an expensive plan. Larry Hays, president/CEO of the Lenexa, Kan.-based Beyond Marketing LLC, said that creating a budget and understanding that mergers are costly are very important and without a firm grasp on the realities of the high price of merging two credit unions, problems can quickly arise.

"You have to remember that you're doing everything twice," Hayes said. "You have two sets of employees, statement vendors, displays, signage and ad campaigns and different fee schedules that you will need to merge into one. You have the cost of creating a new website and merging two banking systems in to one. Credit unions have to understand that a merger is expensive and if you don't budget correctly you could be in the middle and find yourself without enough money to get the job done."

Hayes leads Beyond Marketing, a CUSO that's preparing to launch a direct mail packet that aims to help credit unions prepare a schedule on when and what to communicate if a merger is in the works.

"The pitfalls in a merger are plentiful," Hayes said. "To avoid the difficulties, you have to take it slow, have a plan and involve the employees and community."

Even if the credit unions involved can create a working budget, work with vendors and avoid the monetary hazards, in the end, a successful merger comes down to communication, Hayes said. Town hall meetings with human resource representatives, employees, long-time members and the community can help ease merger jitters.

"Times are changing and this is not your father's credit union," Hayes said. "For a successful credit union merger, you need to stop and think prior to merging because if you don't, it may not be as successful as you hoped it would be."