CUs Announce Possible Merger as CEO Reveals Honest Struggle of Smaller CUs
One reason given for the merger is “it’s becoming more difficult for smaller credit unions to compete.”
On Friday, it was announced that Allegan Credit Union and Rivertown Community Federal Credit Union intend to pursue a merger. Oddly, a shared CEO has connected the two small credit unions located on the western edge of Michigan for the past year.
According to the announcement, the Allegan, Mich.-based Allegan ($82 million in assets, 8.769 members) and the Grandville, Mich.-based Rivertown Community ($78 million in assets, 5,341 members) have been jointly-led by President/CEO Kristopher Lewis since 2020.
“As the CEO of Allegan Credit Union for the past seven years and Rivertown for the past year, my viewpoint on mergers has evolved. Serving in this dual role, I see our similarities and I see our differences, and both should be celebrated and preserved. I have a passion for our industry and for helping the greater good of credit unions, members and the communities we serve,” Lewis said.
In the statement from the credit unions, they addressed those who are quick to criticize credit unions that merge. In part, it stated, “in today’s highly regulated, high-tech environment, it’s becoming more difficult for smaller credit unions to compete at the same level as the bigger players. Left on their own, it is becoming more and more challenging to offer the wide range of products and services that members (who are consumers) want.”
According to the statement, Lewis was involved in creating a start-up CUSO designed to offer CFO and accounting services to credit unions that are unable to afford those crucial resources. “Being involved in CUSOs and serving as a dual CEO, I have gained a greater perspective on what we can leverage and accomplish together as one for our members and our communities.”
He continued, “Our mission at Allegan is community over credit score, relationships over revenue and people over profit. And Rivertown was built for hard-working people who had a genuine interest in helping those that couldn’t find the financial resources from the big banks. This partnership is a perfect way to live out our mission and to go back to why we exist, creating relationships and helping those that don’t have the financial resources on their own. It doesn’t get any better than this!”
If approved, the combined credit union will have an asset size of $160 million and serve approximately 14,000 members. Upon approval from Rivertown members, the merger could be completed by late 2022 or early 2023. The combined organization will operate under a unified brand, but will keep the individual credit union names, according to the statement.
“We’re excited about this partnership and hope it’s just the beginning of many more positive relationships and partnerships to come,” Lewis said. “When your partnership is rooted in a commitment and passion for serving members and communities and doing the right thing, you can be proud to work in this industry!”