By Ray Birch
GURNEE, Ill.—No one is ever lucky when a pandemic strikes, but executives from two CUs that just completed a merger feel they were fortunate—in that the path to their combination progressed smoothly in the last few months.
For leaders of the two credit unions, the $1.41-billion Consumers Credit Union here and the $858-million Andigo Credit Union in Schaumberg, Ill., the process did involve a learning curve around attempting to go thorugh the merger process when when meeting in person is really not an option.
The two credit unions officially merged June 1, creating the fifth-largest credit union in Illinois. They will continue to run their respective operations, mostly as-is, until 2021. During this time, Andigo will operate as Andigo Credit Union, a Division of Consumers Credit Union. The newly combined credit union, which will operate under the name Consumers Credit Union, serves more than 163,000 members and has more than $2.3 billion in assets.
Jean Theis, COO at Consumers and formally COO of Andigo, explained much of the time-consuming face-to-face meetings had been completed prior to mid-March.
“A lot of the heavy work had started before the pandemic hit,” said Theis. “When we formally began this merger, no one, of course, saw this pandemic coming.”
Dave Valentine, chief experience officer, acknowledged the final few months of the deal were indeed a different environment in which to do a merger. He recognized that mergers sometimes fall through when parties eventually disagree, and often poor communication can play a role. But he emphasized both teams worked diligently through the merger to keep communication strong.
“The face-to-face communication is important during a merger; people sitting down in the same room, discussing things,” said Valentine. “But, first, as Jean noted, a lot of the work had been started face to face.”
Theis said the inability to meet in person did not deter the credit unions from finding ways to interact effectively during the final three months of the deal. She emphasized that existing relationships between some of the executives of both CUs, which had been in place prior to initial merger discussions, helped make keeping in touch and staying on the same page easier without face-to-face interaction.
“Even prior to merger talks a lot of our employees were sharing best practices,” said Theis. “There were some standing relationships throughout the entire organizations that helped. And, before the pandemic hit, we were able to do some ice cream socials and other things to being us all closer.”
A ’Dramatic Shift’
But Theis also recognized the “dramatic shift” that took place about mid-March when both organizations had to rethink how they would stay in touch and work their way through the always extensive merger to-do lists prior to June 1.
Valentine said one of the biggest challenges during the pandemic has been finding ways to replace the easy interactions that can take place when people are face-to-face, including the thoughtful exchanges, and the ability to better understand people when they are close and faces and body language provide some subtle clues.
Of the Zoom meetings, phone calls, and emails that replaced gatherings in board rooms, Valentine said meeting and interaction dynamics changed.
“Connecting remotely, sometimes you see people talking over each other—not intentionally, but it happens,” said Valentine. “The larger the number of people in a remote meeting the harder the meeting can be—if you get more than five or six people… I think for any company going through a merger during the pandemic, a group meeting just adds a layer of complexity. I know right now this may be the new normal, but we all are going to have to wade through this.”
No Impromptu Discussions
But what is really missed, said Theis, who added there is no real replacement, are the impromptu meetings, chats and interactions between staff of the same CU that are important pieces of mergers.
“You can't just walk into someone’s office now and say, ‘Hey, you got a minute,’” observed Theis. “Those conversations on the fly don’t happen.”
What all that leads to, said Theis, is having to be much more “intentional” about communication during the pandemic.
“Now I have to make sure I call or email someone, and set aside the time,” she said. “Overall, communication just takes more time now.”
Valentine said the virtual merger meetings also can’t go the distance of the in-person gatherings that used to take place for a half-day or full day.
“You could sit down and hammer out a lot of things in a half day,” said Valentine. “It’s hard to hold a meeting via phone or videoconference for four hours.”
Better Opportunities
Valentine said the merger between the two large credit unions is going to be beneficial for both CUs, the communities they serve, and their members.
“This merger creates better opportunities for both credit unions and it will bring a reduction in operating costs,” said Valentine, citing data systems as the biggest savings. “It’s also going to provide a better member experience—we will bring more products and services forward as well as enhance existing services.”
Added Theis, “We were both financially strong on our own but we really felt coming together, combining our talent and systems, we would be even better.”
Andigo made $5.8 million in net income in 2019, $3.6 million in 2018 and $2.1 million the previous year. Consumers made $8.5 million, $7.8 million and $7.2 million, respectively.
‘Slow the Roll’
While placing the final touches on the merger required some additional time and new approaches during the pandemic, Theis believes if the COVID-19 crisis persists it will reduce the number of credit union mergers this year.
“I think it can certainly slow the roll while this crisis persists,” said Theis. “You have to adapt to the new environment—but due to this economic impact of the pandemic we could likely see even more combinations down the road.”