Six B.C. credit unions plotting six-way merger/amalgamation | General financial discussion | Discussion forum

By way of an amalgamation into a single legal entity, six B.C. credit unions based in the East and West Kootenay region of the province, have been in the midst of a massive merger plan since late 2017. The six credit unions are as follows:

• Columbia Valley Credit Union
• East Kootenay Community Credit Union
• Grand Forks & District Credit Union
• Heritage Credit Union
• Kootenay Savings Credit Union
• Nelson & District Credit Union

They'd originally plotted a seven-way merger that would've included Creston & District Credit Union, but their board opted not to proceed in December 2018, the most recent update. Nevertheless, the six remaining organizations plan on reviewing and approving the revised plan (where they're at now) and then submitting it to the Financial Institutions Commission (soon to be renamed Financial Services Authority of British Columbia) for approval to hold member votes. Following that, member approval would be sought and they would amalgamate into a combined entity.

Although six credit unions are involved in the proposed, revised amalgamation plan, the assets of each are such that the combined credit union would not increase in size that much. Still, it would mean that the current 43 registered B.C. credit unions will be reduced to 38 (note that only 36 of those are consumer-facing as Central 1 Credit Union is a back-office service provider and Stabilization Credit Union is an administrative credit union where the regulators are forced to temporarily assume a member credit union's assets and liabilities pending the sale or transfer to another B.C. credit union). If First West Credit Union ultimately is continued as a federal credit union and Westminster Savings Credit Union and Prospera Credit Union ultimately consummate their second chance at the "altar", then the number of consumer-facing B.C. credit unions will drop further to 32.

So, how big is each of these six credit unions?
According to the fourth quarter 2018 statistics from the Canadian Credit Union Association and, where required (since the report lists only the top 100 credit unions by asset size), from individual credit union financial reports or my own logical estimates (noted in parentheses following each), by credit union, each had the following the assets, number of branch locations, and members:

• Columbia Valley Credit Union

- CCUA System Rank: Not in the Top 100
- Assets: $158,317,959 (assets as at December 31, 2018)
- Number of Branch Locations: 1
- Branch Locations: Golden
- Members: Not available

• East Kootenay Community Credit Union

- CCUA System Rank: #88
- Assets: $374,872,429
- Number of Branch Locations: 4
- Branch Locations: Cranbrook, Elkford, Fernie, and Sparwood
- Members: 10,997

• Grand Forks & District Credit Union

- CCUA System Rank: Not in the Top 100
- Assets: $194,841,464 (assets as at December 31, 2018)
- Number of Branch Locations: 1
- Branch Locations: Grand Forks
- Members: Not available

• Heritage Credit Union

- CCUA System Rank: Not in the Top 100
- Assets: $180,000,000 (estimated, based on estimated continued $7 million annual growth in assets from 2016-17 at which point they had approximately $173,000,000 in assets as at December 31, 2017, the most recent FY for which financial data is available)
- Number of Branch Locations: 3
- Branch Locations: Castlegar, Greenwood, and Slocan Park
- Members: Not available

• Kootenay Savings Credit Union

- CCUA System Rank: #37
- Assets: $1,205,883,658
- Number of Branch Locations: 11
- Branch Locations: Castlegar, Fruitvale, Invermere, Kaslo, Kimberley, Nakusp, New Denver, Radium, Salmo, South Slocan, and Trail
- Members: 37,340

• Nelson & District Credit Union

- CCUA System Rank: Not in the Top 100
- Assets: $230,227,931 (assets as at December 31, 2018)
- Number of Branch Locations: 3
- Branch Locations: Crawford Bay, Nelson, and Rossland
- Members: Not available

With the exception of Castlegar, there is no geographic overlap so it is unlikely that any branch closures would result, which is a good thing. Keeping two Castlegar branches, if they're located in different parts of town, is also a distinct possibility, too.

So, overall, this seems like a good merger.

Combined, and assuming no branch closures, they would have $2,185,825,482 in total assets (give or take $10 million or so, based on the estimated assets for FY 2018 for Heritage Credit Union), which would still be good enough to bump them up from Kootenay Savings' current 37th place position to 26th, just ahead of Gulf + Fraser Fishermen's Credit Union and Sunova Credit Union (parent company of the Hubert Financial virtual banking branch/division). By total branches, they would have 23 branches.

No word on what the combined entity would be called, but Kootenay Savings would be the likeliest continuing name unless they opt to choose an entirely new name not defined by geography, particularly if they bring in further partner(s) (i.e., Summerland and District Credit Union, which is based in the South Okanagan).

Also note that Kootenay Savings has an insurance brokerage subsidiary that recently acquired Summerland and District Credit Union's insurance operations. Moreover, Heritage Credit Union and Creston & District Credit Union jointly own Kelowna Valley Insurance Services, Ltd., an insurance brokerage with two offices in Kelowna.

And finally, with all these mergers happening, the barrier to entry for inclusion in the CCUA's "Top 100 Credit Unions" semi-annual report will decrease as there will be room for close to 10 new credit unions over the next two years, assuming no further mergers.

Cheers,
Doug