Hubert - merger with Access CU (Accelerate Financial) | Page 4 | Hubert Financial | Discussion forum

Norman1 said

gicjunkie said
FYI: I don't know if I am using the correct site for this information, but according to the one I checked out (below), as of quarter #2, Access is the #12 credit union in Canada, except for Quebec (based on total assets), Sunova (Hubert) is #26 and Noventis is #41. It would seem to me that Access would be the resulting entity or dominant partner, not Sunova as others have suggested.

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That is correct.

Access is the dominant participant in the merger. That was shared in the merger info. It is not a merger of equals:

	Combined	Access	Noventis	Sunova
Balance sheet assets	$9.49B	$6.03B	$1.14 B	$2.32B
Assets under management	$10.07B	$6.36B	$1.23B	$2.48B
Members	169,700	92,000	28,000	49,700
Employees	796 FTE	396 FTE	150 FTE	250 FTE
Branches	52	26	12	14
Efficiency	66.04%	63.05%	72.55%	68.16%
Equity	6.28%	6.47%	5.71%	6.09%
Loan portfolio	$7.67B	$4.79B	$867M	$2.01B
Capital adequacy	12.86%	12.55%	13.50%	13.52%

The merged credit unions will carry on with the Access name:

Have you decided what the name of the new credit union would be?

All three credit unions are well-respected and well-known organizations in their operating areas. After much discussion, all three boards identified the strength of the Access name and the applicability and relevance of their brand when reflecting on the mission, purpose, and shared values for all organizations. …

… And, while we will adopt the Access name, we are confident that many attributes of the Sunova and Noventis brands will integrate well into the brand for the ‘new’ Access, and the best elements of our respective cultures will live on as part of the new organization.

  

Wow, for what it's worth, those efficiency ratios are quite healthy. On capital adequacy, Access is actually the weakest link of the three.

For context, the Big 5 banks routinely have efficiency ratios in the low to mid 50s; Canadian Western Bank is usually in the mid 40s to low 50s. Equitable Bank and Home Capital Group are usually in the low 30s to low to mid 40s. HSBC Bank Canada, despite its cost cutting over the years, persistently remains in the upper 50s to low to mid 60s. And, the much-ballyhooed Coast Capital Savings and First West consistently have efficiency ratios in the mid 70s to mid 80s, which is atrocious, considering they persistently say that merging = greater efficiency. Something is not right here...perhaps it is executive compensation. 😉

Cheers,
Doug

Loonie said

The more I try to digest all this, I am inclined to think they put the cart before the horse in their merger proposal to members.
They tried to tell us a number of "positives" about it, many of which will only be relevant to some members, without ever telling us clearly why the idea had come up in the first place.
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I think they are early too.

The consumer-directed finance and Payments Canada modernizations are still in development. There is also the question of how useful those are to the Sunova members.

Consumer-directed finance (open banking) allows outside parties to access one's banking data, including transactions and ID info. It is not that useful to people who bank mainly with one bank. It is also a federal government initiative that may not have jurisdiction with provincially regulated credit unions.

Similar with Payments Canada modernizations. One of them is under-one-minute transfers through a Real-Time Rail.

Employers may not want to pay extra for under-one-minute transfers. They may continue to use the current ACCS system to deliver payroll direct deposits into employee accounts by bank branch opening of each payday.

Utilities also may not care if the monthly customer bill payment shows up in 60 seconds or in the next two business days.

Loonie said
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It's starting to feel like a bit of a "snow job", and I'm wondering who or what is behind it. It doesn't feel good. Maybe they really did fall for "bigger is better", taking it as a given.
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The question of being better is a complicated one.

Bigger is better for organizational survival. More members, larger geographic footprint means a more diversified loan book and deposit book.

Think Royal Bank with its loans and deposits diversified across Canada across all kinds of people and businesses. It is one of things that gives the Big 5 Banks staying power.

In contrast, think of a hypothetical credit union exclusively for airline employees.

But, bigger isn't better for market leading deposit rates.

I don't think the interests of all the Sunova members are the same. Members who are employees have a slightly different set of interest than the brick-and-mortar branch banking members. The interests of the online-only Hubert members are also a bit different.

I think whether or not the proposed merger will form something better for a member will depend on the kind of the member.

The asset numbers in the table are as of June 30, 2021.

The 2020 financial consolidated statements were as of December 30, 2020. According to Note 26, two days after the 2020 statements, Access merged with Crosstown Civic Credit Union that had $2.68 billion in assets:

26. Subsequent event

During the year the members of the Credit Union voted in favour of the Credit Union merging with Crosstown Civic Credit Union Limited. The merger is effective January 1, 2021. The amalgamated Credit Union will operate as Access Credit Union Limited.

Hubert Financial doesn't legally exist separately from Sunova CU. It is just the name of a department or division in Sunova CU. There's no separate vote for the Sunova shareholders who are online-only Hubert Financial clients.

The voting email I got from Hubert today has this lengthy note from the Hubert Managing Partner, Tara Dowsett:
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Hello,

My name is Tara Dowsett. I’ve been Managing Partner of Hubert Financial for the past eleven years, and this year will mark my twenty-first anniversary with the organization. (Time sure flies, eh?) Today, January 25 at 9:00 am CST, online voting for the proposed merger between Access, Noventis, and Sunova Credit Union begins. Voting will end at the Special Meeting of the Membership on the evening of January 27. Pre-registration is required if you wish to attend the virtual Special Meeting.

If you attended the virtual member forum on January 18, you would have learned a little bit about why each respective CU’s Board of Directors is recommending this merger to the Hubert Financial membership.

Before you head on over to the voting site to cast your vote, I’d like to answer some questions that we’ve been getting over the past few weeks.

If the merger goes through, what will happen to Hubert?

If the respective memberships vote in favour of the merger, the two online divisions, Hubert (Sunova) and AcceleRate (Access) would continue to operate as they do today. Any decisions about the blending of those two online divisions, or the other subsidiaries operated by all three credit unions, will be made after the official merge date in July 2022.

Will the high-quality service stick around, in addition to my favourite service representatives?

Over the past eleven years, I’ve enjoyed getting to know Hubert members and speaking to you directly on the phone, and I know my staff feels the same way. I can confidently say that we are committed to upholding our service standards, and there are no plans whatsoever to transition over to any type of automated system. You will always have the opportunity to speak to a well-trained and knowledgeable call-centre staff member. (During regular business hours, of course).

There will be no layoffs as a result of the merger; however, some roles may change, retirements will occur and some positions may be added. With an organization this size, there will likely be additional opportunities that require more in-depth knowledge or specialization in order to serve members and internal staff effectively. In addition, many executive members here at Sunova and Hubert would continue to remain at the leadership level to influence the decisions of the potential new organization.

What about products and rates?

As we continue to work through the process, we will complete a thorough review of all products and service plans available at each credit union, and the same would be done for the online divisions at a later point in time. While the exact specifics of the products, services, and rates members will have access to will be finalized after the new organization is formed, the commitment to our membership and desire to provide an optimal banking experience is top of mind and one of the key drivers of this proposed collaboration.

If you missed it at the forum, Sunova and Hubert will transition over to the banking system used by both Access Credit Union and Noventis Credit Union, likely in early 2023. Currently, Hubert offers a lot of appealing products and services that AcceleRate members do not have access to. Integration in this scenario means consolidating onto one system while including the very best features/services available at each. This means Hubert members won’t lose any valued functionality, and members of both credit unions would likely experience some enhanced functionality moving forward.

Lastly, there will be a continued focus on enhancing the virtual banking experience, without losing sight of the service and key benefits members appreciate most on each platform.

--

This proposed merger is recommended because we truly believe it will be better for our members, our staff, and our communities. And I hope you all have some comfort in knowing that Sunova has always prioritized our staff and our member experience within our strategic planning and our decision-making. Happy and engaged staff = great service for our membership, and that is very much rooted in the foundation for this decision to (hopefully!) merge with these two like-minded credit unions.

Thank you for your patience as we’ve navigated through this process, thank you for your ongoing trust in Hubert’s products, services, and staff, and thank you for choosing Hubert as your online financial institution. I look forward to the future of Hubert Financial.

Sincerely,

Tara Dowsett

Managing Partner, Hubert Financial
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I responded to Tara Dowsett yesterday, expressing an interest in knowing how many votes for and against by MB voters and non-MB voters once all the votes are counted.

I don't know whether they can or want to tell us that but it would be interesting to understand how much influence us "remote" clients/members had on this merger decision ...

savemoresaveoften said

In my mind, getting bigger means less attractive rate offerings... I voted accordingly.  

Sometimes 'Yes' ... sometimes 'No'. For examples of 'No', just think of the likes of Oaken (by Home Trust/Bank), EQ (by Equitable Bank), etc.

After reading though all the WorryWarting and HandWringing that's been going on here in this thread, it hasn't changed my mind a bit. But what it has exposed, is the mindset of some here.

FWIW, I voted 'Yea' ... Let the arrows Fly ❗

Dean

Not a surprise, the merger is going ahead, 75% in favour. (I attended the meeting)