The board of directors of Spectra Credit Union has passed a motion to move forward with a recommendation to their members to merge with Affinity Credit Union which is headquartered in Saskatoon but has a strong presence throughout the province.
The board has been considering the move for about two years and has been contemplating the more specific options to join hands with a major credit union with provincial scope since January of this year.
The merger was seen to be necessary since Spectra was realizing a very strong growth pattern that required supporting profits and a larger asset base. Affinity will supply that base with it's capabilities of doing deals in the $50 to $70 million range. It's current asset base is around $2.8 billion and by eventually adding the $708 million in Spectra assets, the Affinity strength will be just that much more capable, said George Keter, chief executive officer for Affinity who spoke with The Mercury Tuesday morning.
Wayne Amos, president of the Spectra board of directors, said that "while Spectra is financially strong, the directors recognize market pressures to stay competitive in an increasingly sophisticated and regulated industry. A merger with Affinity Credit Union will provide our members with continued competitiveness, excellent local service and community support and strong governance structure."
In fact, it was Affinity's governance structure that appeared to impress the local board as they contemplated a merger situation with either Affinity or Regina-based Conexus Credit Union.
Scott Flavel, president of Affinity's board, said that both CUs carried strong values and commitment to communities that they served and so that together, they would be stronger.
With the proposed merger, Affinity will be able to add Spectra's 10 branches to its current 44 branch count and provide a presence in southeast Saskatchewan, one area that Keter said Affinity had not been a major player. As a result, the proposed amalgamation will not see any job losses as the due diligence process moves forward.
"No one loses jobs or will be forced to relocate. That's a core principle we adhere to. We walk the walk," said Keter in response to a question concerning a possible transition.
As far as names are concerned, both Keter and Spectra's CEO Tim Schroh are speculating that the southeast branches will eventually be affixed with Affinity monikers.
As far as timing of the proposed mergers is concerned, both CEOs felt that early to mid-2013 could signal the right time to make the final moves.
"Spectra has expertise that they bring to the table that puts them in the lead in some areas. We're anxious to be able to share that, along with some wonderful growth opportunities," said Keter.
"Our governance structure at the same time keeps us true to our grass roots and local level decision-making. We do not have a head office model. We embrace diversity and finding different ways to approach business and our board had no difficulty in agreeing to the guiding principles that Spectra's board put in front of them. They were on the same page. Our new credit union will have the expertise of a large credit union yet the connection with members will be strong in a 21st century setting," Keter added. "It's a provincial scope with regional presence and the key for Spectra's members is the fact they will be served by the same people in the same environment; no branch closings."
Keter and Schroh said they expected that their respective members will be contemplating the merger proposal and arriving at a conclusion in time for next spring's annual general meetings.
"Due diligence has to unfold and we agree that to do it right is more important than doing it quickly," said Keter.
Schroh said that the concept was to "position our members to take advantage of continued success and growth in southeastern Saskatchewan by tapping in to the capital, expertise, technology and capacity of a provincially based credit union."
The merger will allow the new model to offer the best financial products and services in the major cities as well as the rural communities.
Schroh said the two credit unions are setting up a joint steering committee that will ease concerns or any impact on employees and members.
Keter said that Affinity is in the process of conducting even more merger discussions with some smaller credit unions around the province.
Affinity has three branch operations in Regina as well as dominant positions in Saskatoon and central Saskatchewan and now they have a strong influence pending in southeast Saskatchewan with this week's announcement.