Page 43 - BusinessWest December 22, 2021

Merger
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ing issues for both.
“This was another win-win because
our staff will stay employed while Pol- ish National will be able to bring on experienced help to fill any openings they might have,” she explained.
In recent years, both organizations have grown through mergers with smaller credit unions. On a national level, Kelly told BusinessWest, approxi- mately one credit union per day is involved in a merger.
Strategic Partnership
Premier Source began in 1941
as Kelko Credit Union, founded by employees of the Kellogg Envelope Company. Over the years, Premier Source acquired employee credit unions from companies such as Spald- ing, Hasbro Games, and Western Mass Electric. While membership now exceeds 4,500, Raymond said its growth still doesn’t provide the economies of scale of larger institutions.
“You don’t merge with someone you’ve only met a few months ago. It usually involves people you’ve known for at least several years.”
“For example, interactive teller machines have become popular, but they are extremely pricey, and just buying one doesn’t recoup the invest- ment,” she said. At $80,000 each, an institution needs to own several ITMs to find any economies of scale.
By agreeing to the merger, Pre-
mier Source will not be investing in ITMs, but its members will see a direct benefit. A common practice when a credit union merges involves paying
a dividend to its members. Raymond explained that members are the reason Premier Source has a strong capital foundation, so the board will soon vote for a special dividend to compensate members for staying with the credit union.
“It’s a way to reward members for their longevity. Members who have been with us for more than 10 years will receive the largest dividend,” she said, adding that most members have belonged to Premier Source for more than 10 years.
Far from a cold and calculated busi- ness deal, Kelly said a credit-union merger is typically a more personal type of transaction, done only with people who have earned one’s trust.
“You don’t merge with someone you’ve only met a few months ago,” he noted. “It usually involves people
you’ve known for at least several years because you want to make sure your members and employees are taken care of as a result of the merger.”
Kelly said he and Raymond go
way back, having crossed paths many times because they work in the same industry. “I’ve known Bonnie for a long time. She is a high-quality and talented person.”
The next step in the merger process involves regulatory approval from the Massachusetts Division of Banks, the National Credit Union Administra- tion, and the Massachusetts Credit Union Share Insurance Corp., as well as approval from the memberships of
both credit unions.
A recent news release suggested
the merger could be completed by the spring of 2022. Kelly, a former regula- tor, said he would not offer a timetable because it’s completely in the hands
of the regulators as to when they com- plete their work on the merger.
Healthy Outlook
Polish National ranks 174th among the top 200 healthiest credit unions in the country, according to the Coopera- tive Credit Union Assoc. Kelly is proud of this accomplishment and noted that it’s positive news considering there are
5,164 credit unions in the U.S.
For now, the numbers Kelly looks forward to involve the 4,500 Premier Source members joining the 25,000-
plus members of Polish National. It’s a fitting way to start the next 100 years of the credit union,” he said.
“While our founders were Polish, we have always been a community credit union and will continue that tradition,” he added, noting that the quote cred- ited to the revered TV22 meteorologist John Quill still rings true: “you don’t have to be Polish to be a member.” u
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