Spectra Credit Union's board of directors believes that Affinity Credit Union is their best choice for a merger partner.
The board passed a motion at a meeting August 9 to proceed with a recommendation to its members that a merger occur with Affinity, which is based in Saskatoon. An announcement was made four days later. Spectra's members still have to give their approval.
Spectra also met with representatives from Conexus Credit Union about coming together, and board chair Wayne Amos said they met with representatives from three other credit unions about coming together under one entity. Those other credit unions ultimately didn't want to amalgamate.
Amos said Affinity carries numerous strengths: an emphasis on co-operative values; a governance structure that includes community councils; a powerful equity position with $2.8 billion in assets; and a commitment to community giving that extends to smaller communities with Affinity branches.
Affinity would continue with Spectra's legacy commitments, such as the 10-year, $1 million pledge for the naming rights to Spectra Place. Affinity is also very interested with the concept of the Spectra Community Foundation, since Affinity currently doesn't have such an initiative.
"The future of the community foundation will be determined over a course of time," said Amos. "Either way, they have a very strong community giving program."
Affinity has indicated that the southeast region could have as many as three seats on Affinity's board. Spectra's board had requested to have at least one board member as a condition of a merger.
"We certainly will be represented, and I believe well represented, on the Affinity board," said Amos. "Based on their assets and based on Spectra's assets (of $708 million), when you look at the assets, three board members seems very appropriate."
Spectra Credit Union CEO Tim Schroh said Spectra's board had nine or 10 guiding principles to carry them through the process. They covered topics ranging from finance to people to member services to governance. Affinity and Conexus Credit Union, which was also considered by Spectra's board as a potential partner, met those principles.
Schroh cited the Affinity's governance structure, with the community councils, as a unique trait that caught the board's attention.
"They use community councils, and have delegates that get elected at the district level, and then those delegates elect the board of directors," said Schroh. "Through that, they have well over 70 delegates. Their member representation, as it feeds up into the board level, is very unique and very grassroots."
A merger with Affinity would also give Spectra members increased value, Amos said, with very competitive rates and new services.
"Affinity, just based on their size, will enable a merged entity here in the southeast to be very competitive in terms of commercial lending," said Amos. "We have some very experienced commercial lenders here with Spectra, but this will just broaden their base with what they will be able to do with a larger credit union."
Schroh said the credit union's members won't notice much of a difference if the merger does proceed. But it would allow the credit union to take advantage of a larger scale, size and capacity to meet member needs, as industry and commercial business continue to grow.
A date hasn't been set for the membership vote, but Amos said he would like to see the merger happen within the next 12 months.
The vote will happen during a member's meeting.
Amos said he doesn't expect there would be job losses, or branch closures, if the merger should proceed.
Affinity Credit Union also welcomed the news of the merger.
"Both Affinity and Spectra Credit Unions have strong credit union values and a sincere commitment to the communities we serve," said board president Scott Flavel. "The credit unions also have unique community experiences and strengths and together we would be even stronger."
"Each credit union is a strong, independent organization, and we believe that coming together in a partnership ensures our members continue to have access to the best products and services in the major cities as well as in the rural communities," said CEO George Keter. "We're approaching this proposed partnership as the right thing to do for all stakeholders: members, communities, and our employees."
Affinity boasts branches in 36 communities, including Saskatoon and Regina, an attribute that was coveted by Spectra's board. Their closest existing branches to Estevan would be in Sedley and Milestone.
Spectra Credit Union operates 10 branches throughout Southeast Saskatchewan. Its head offices are in Estevan.