The proposed merger between Lakeland Credit Union (LCU) and Vision Credit Union will not proceed.
In a joint news release, the two institutions said “On September 30, both credit unions’ boards agreed it was best to mutually end the merger talks to allow each credit union to pursue individual operations.”
LCU’s Chief Executive Officer Kelly McGiffin said that while the two credit unions were compatible in many ways, the effort of bridging the obstacles to a merger outweighed the benefits.
He said LCU management and board studied the merger and conducted due diligence based on the information before them. He said that’s a necessary part of the process, and it wasn’t disappointing when the board decided not to proceed.
“No, I wouldn’t say disappointing at all,” McGiffin said. “We knew full well, as we announced when we went into discussions with Vision Credit Union, that it was an exploratory process.
“The process was to really understand whether this was a positive move forward for Lakeland and how it compared to the other alternative, which was to stay independent and autonomous through these next challenging years.”
The process worked for both institutions the way it is supposed to, he said, and it led to the best decision.
“What it did for us is it confirmed that indeed staying independent and autonomous is the best choice for Lakeland, without doubt,” he said.
McGiffin said neither credit union walked away from the discussion, but that it was a mutual decision not to proceed. He said the organizations share similar values and have similar respect for each other, based on similar historical successes.
“But that doesn’t necessarily mean that the two organizations match,” he said.
“And I think we found over the course of discussions and due diligence that there were some challenges in that integration, and there were some challenges in meshing the two cultures.”
McGiffin says LCU is in good shape to continue independently, and is not looking for other merger or consolidation opportunities, at least for now. The downturn in the energy economy and the Covid-19 pandemic have not weakened its capital strength.
“Our projections say it won’t compromise our capital, that we can reset and do the things we need to do to strengthen ourselves effectively. And once we get through the storm, not only not have a capital impact, but actually be positioned to take advantage of opportunities as the economy opens back up,” he said.
“We’re actually in a huge advantage to many credit unions our size and smaller, so it allows our runway to be a lot longer before we’re ever forced to look at consolidation as an answer.”
McGiffin gives full credit to the LCU board for its ability to analyze information and reach a decision.
“Just the process they went through, the discussions we had, the questions they asked. Material that they evaluated without emotion, with real logic and with the stakeholders’ best interests in mind,” he said.
“It is one of the most effective boards I’ve worked with.”
Although the merger has been called off, LCU and Vision Credit Union remain on good terms.
“Vision is a very respected partner. They were very professional and courteous through this process,” McGiffin said. “We’re parting as very good neighbours, and hope that we can continue to collaborate on an informal basis.”