Merger of threequals: A scattered trio of credit unions joins forces

Credit union mergers frequently look good on paper and make strategic sense, but oftentimes such deals fall apart because the two CEOs can't agree on which one will get to stay in charge. 

It's an even bigger pickle when it's a merger of three credit unions, each with its own CEO who wants to stay on board. But as the old Vulcan proverb goes, the needs of the many outweigh the needs (or in this case, the egos) of the few. 

"We put away our egos and focused on what we're good at," said Matt Selke, president and CEO of the $96 million-asset Pinnacle Credit Union in Atlanta, which is merging with the $80 million-asset RVA Financial Federal Credit Union in Richmond, Virginia, and the $52 million-asset MUNA Federal Credit Union in Meridian, Mississippi. 

Selke won't be its CEO. That honor would go to Bo Pittman, president and chief executive of MUNA. "This guy can lead," Selke said of Pittman, who would also be a regional president of the combined entity.

Selke will be the chief financial officer and a regional president. RVA Financial's CEO, Rick Preble, plans to be the chief operations officer and a regional president.

Pittman has more than 30 years of Air Force leadership in his background. Selke said he noticed Pittman right away when they began serving together on the board of directors of CU*South, a credit union service organization, about five years ago.

Preble had the same impression.

At a breakfast meeting early in the process, "I looked him right in the eye and said, 'I'm going to recommend you as CEO,' " Preble said. "Bo has as much leadership experience as Matt and I combined."

While only one gets to be CEO, the need for three regional presidents stems from the lack of overlap in the credit unions' branch maps. Each constituent plans to maintain its individual brand for a short time after the merger is complete. The combined organization, which would be based in Atlanta, will eventually take on a new name. 

But the deal wasn't motivated primarily by geographic expansion. Pittman said the combined organization will have about $220 million of assets, and that will allow it to afford things that the three companies could not individually. For example, Pittman said the savings from combining back-office functions will allow for hiring in areas including compliance. 

"The regulatory guidance changes so frequently that we really need somebody in that area full time," Pittman said. "But for a small institution like mine, it was very difficult to afford someone to focus on that area alone."

About 800 miles separate Meridian and Richmond. Pittman said it would be ideal to eventually fill in some of the gaps in the footprint with other mergers, and that may happen over time.

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According to Preble, distance is not as large of an issue today as it might have been 20 years ago. "With technology where it is today, the distance just doesn't seem as far as it used to," Preble said. 

And there was a recent blueprint for a credit union merger spanning hundreds of miles. 

In 2020, the $1.3 billion-asset Deere Employees Credit Union in Moline, Illinois, and the $338 million-asset Infinity FCU in Westbrook, Maine, announced they had agreed to merge.

Ultimately, the difficulties each of the three credit unions faced were more of an issue than any one CEO's ego. 

"We noticed that we're all cracking the same nut when it comes to the challenges that we're facing and the things that we're doing. And a lot of our strategic focus was similar," Preble said. "And we thought maybe we didn't have to fight this fight alone."