Two Wisconsin credit unions – the $569 million Pioneer CU in Green Bay and the $459 million Capital CU in Kimberly – have agreed to merge by July 1, 2014, they said this week.
The new billion dollar cooperative – Capital Pioneer Credit Union – will serve more than 88,000 members from 23 branches stretching from Sturgeon Bay to Oshkosh.
Though Pioneer CU is merging into Capital CU, Tom Young, president/CEO of Pioneer, said he considers it a partnership of equals as both community charter credit unions share most of the same marketplace in northeastern Wisconsin along Lake Michigan.
“If you were going to put two credit unions together I don't think you could find a better fit,” Young told the Credit Union Times on Thursday when the merger agreement was announced. “It is a partnership.”
Young said he approached Alan Zierler, president/CEO of Capital CU, in March with the merger proposal.
“We're 9% percent capitalized. Capital is 14% capitalized,” said Young. “Together, we'll be a billion dollar plus credit union with 11% capital. I've gone through 13 smaller mergers in my career, but nothing like this. This is definitely a merger of equals.”
Zierler said, “When you look at it, there is no downside. This (merger) will continue to offer our members premium rates, now with an even wider selection of services. Additionally, we will be able to specialize more in the future to better serve the changing needs of our members.”
Merger plans call for Zierler to be named CEO and Young to be named president of operations for the new credit union, they said.
Young said there will be no employee layoffs. The new credit union will have about 316 employees. There will be no branch closings because none of them overlap in providing services to members, the credit unions said.
Young said he expects the new credit union will benefit from economies of scale when it installs a new IT system when the merger is completed in July of next year. The merger also is expected to produce savings in marketing and other operations.
The applications are expected to be filed this week to request approvals from the Wisconsin Department of Financial Institutions and NCUA. The merger also requires the majority approval from Pioneer CU members. That member vote is expected to occur in the fall.
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