BEDFORD, Ind.–In a rare development, members of Hoosier Hills Credit Union have rejected a merger with Centra Credit Union. The two credit unions had announced in January their plan to combine to create a CU with more than $3 billion in assets.
The credit unions said in a joint statement that “despite extensive communication from Hoosier Hills outlining the factual details of the merger, the vote was impacted by the circulation of misinformation.”
The credit unions did not say what that misinformation consisted of. The vote tally was not released.
Looking for ways to Grow
“Our members are dedicated ambassadors for Hoosier Hills Credit Union, and we appreciate their energy and passion,” Hoosier Hills CEO Travis Markley said in a statement to Inside Indiana Business. “We will continue to find new and innovative ways to grow and deliver enhanced products and services now and into the future, as we focus on serving our membership and the underserved. Centra is an outstanding, strong financial organization and we will continue to be collaborative partners.”
In a statement on its website, Hoosier Hills CU told members, “Credit Unions exist to serve our Member-owners, Team Members, and Communities. Our goal in pursuing a Centra partnership and putting this merger vote before the members was to increase and enhance our member products, services, and conveniences as well as our ability to compete and give back to our Communities, while providing greater career opportunities for our team members.
“Decisions like this merger are made by Members, who as owners of our institution, can vote. The preliminary vote results released by the third-party administrator indicated that the majority of Hoosier Hills Members who voted are not in favor of merging with Centra under the terms of the agreement as outlined,” the statement continued. “Although we are disappointed in the voting results, we appreciate the passion of our Hoosier Hills Members, and their willingness to be involved in this democratic process.
The full statement is available here.
Credit Unions are ‘Unique’
In a statement on Centra CU’s website, CEO Rick Silvers said, “Credit Unions are unique in that we are businesses who operate democratically. We are owned and controlled by our members, who each get one vote in any potential merger partnerships. Hoosier Hills Members had the opportunity to vote yesterday. Unfortunately, we did not attain the required majority vote. As a matter of formality, Centra has decided to proceed with our member vote on June 3, allowing our members to use their voice.
“We appreciate your involvement in our credit union’s democratic process. While we are disappointed by this decision, we still strongly believe this merger partnership is in the best interest of members of both Centra Credit Union and Hoosier Hills Credit Union,” the statement continued. :Among many other benefits, the unified credit union would be positioned for future growth and sustainability, ensuring Members in central and southern Indiana could be served by their local credit union for generations to come. However, we respect that Hoosier Hills Members voiced concerns about the partnership. It is now our responsibility to hear and understand their members’ concerns and move forward in a way that respects the wishes of their member-owners.”
Centra’s full statement is available here.
Financial Performance
Columbus, Ind.-based Centra Credit Union has $2.2 billion in asset and approximately 160,000 members. It had $1.32 million in net income through the first quarter and capital of 11.80%. Hoosier Hills CU has $926.3-million in assets and approximately 38,000 members. It posted $715,905 in first quarter net income, with net worth of 12.45%.
The two CUs are headquartered approximately 50 miles apart.
In a statement to Inside Indiana Business regarding any future merger, a spokesperson for Hoosier Hills CUsaid, “We would never say never, but our focus, as always, is on understanding our members’ concerns and moving forward in a way that respects their wishes as member-owners of Hoosier Hills Credit Union.”
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