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Case Study: CMPG Assists in Bank Acquisition

Credit Union Selects CMPG to Assists In Bank Acquisition

At a $1.3+ billion Credit Union, the Chief Operations Officer (COO) was responsible for completing the acquisition of an in-market bank via a legally-orchestrated purchase transaction. This was a strategic acquisition for the Credit Union, as it provided key expansion opportunities with physical locations and the pre-existing field of membership.

The challenge was working with multiple representing sets of attorneys and regulators from both industries (Banking and Credit Unions) and the impacted states through the complexities of ordering, staging and receiving approvals for the transaction. At the time of this transaction, this was the first of its kind.

Strong project management support was sought, coupled with an understanding of both the Banking and Credit Union processing environments that needed to be combined.

Which is why CMPG was engaged to lead this effort.

The Credit Union set out to secure assistance to accomplish the following:

  • Organize the efforts to seek and obtain approvals for the transaction
  • Challenge the proposed integration framework
  • Develop and track the project milestones and timeline
  • Evaluate and recommend integration options
  • Lead multiple project groups (Legal/Regulatory, Integration and Conversion)

The project focused on ensuring that all steps to usher along the interrelated regulatory approval process were expediently addressed. CMPG acted as an intermediary between the combining organizations, working with both sets of attorneys as they guided legal documents and information through the regulatory approval process. CMPG worked to identify and evaluate where banking services would expand pre-existing credit union services or products. Strategies for the support or exit of specific services or products required development, presentation and approval from both organizations prior to the completion of the transaction and the start of integration.

For example:

  • How would banking customers transition to become credit union members?
  • How would this change be communicated?
  • How would the qualifying credit union depository relationship be addressed?
  • How could the organization effectively service members outside the existing defined credit union footprint?
  • How would new lending disciplines be supported and on what solution?
  • How would products not available to be offered by the credit union be exited?

A plan was drafted that allowed the completion of the purchase transaction approval within nine months, with a subsequent integration and absorption of the acquired locations, ATMs and accounts within 90 days after the transaction was completed. This included:

  • Due diligence review and guidance on the termination of key banking contracts
  • A determination as to where commercial loans would be housed and serviced
  • A mortgage subservicing conversion
  • A strategy for the immediate delivery of expanded services upon legal day one
  • Detailed member communications
  • Negotiation and preparation for account conversion

Company:Credit Union
Asset Size:$1.3+ Billion
Services:Project Management / M&A
Duration:12 Months
Key Challenges:
  • Coordination between all regulators, lawyers, and service providers
Key Benefits:
  • CMPG provided an unbiased view of the mechanics required to integrate the two organizations operating upon differing strategic formats (members vs. customers) and two differing processing platforms.
  • CMPG created through project management discipline, the metrics to hold all project participants across multiple organizations accountable for meeting the project goal.
  • The transaction was guided and completed within the year of initiation providing a strong financial benefit and a marked percentage growth in market-share for the credit union.