Amid promises that branches will not close, employees will not lose their jobs, and services and products will only be increased, Island Savings Credit Union members voted in favour of a merger with Langley-based First West Credit Union.
According to results released Friday, 79.62 per cent of Island Savings members holding Class A shares who voted supported a special resolution to allow the merger. More than 79 per cent of Class C investor shareholders who voted also pledged their support. Approval required approval of at least 66.66 per cent of each class.
“I’m pleased on two counts — one it was a very strong [voter] turnout, and secondly the support we’re receiving is very satisfying,” Island Savings chief executive Rod Dewar said in an interview.
Dewar said they would normally get between 1,200 and 1,500 members out for a vote on rules or procedures.
“This time, we had well over 8,000,” he said.
While Dewar pushed hard for the merger, he won’t be around to enjoy it. After seven years with Island Savings, he will leave when the merger is finalized Jan. 1, 2015. “That’s the bittersweet thing. There’s only room for one CEO, of course,” he said.
Launi Skinner will remain as chief executive of First West, while current Island Savings chief operating officer Randy Bertsch will become president of Island Savings, a division of First West Credit Union.
Dewar said he’s leaving the firm in great hands and members will have a stronger credit union.
“In terms of everyday interaction with Island Savings and its employees, there won’t be much change. It will be the same branches, the same brand on the door and the same employees ... but over time, there will be new products that will be available to them,” Dewar said.
He noted business customers will see a difference. “Our business members who are growing their business at a pace that needs financial support, we will be able to continue to grow with them rather than hand them off when we reach certain lending caps.
“We will have a significant amount of new lending room as a result of being part of a larger business.”
During information sessions leading up to the vote, some Island Savings members had expressed concerns that joining a bigger firm did not necessarily mean better service for Island customers, but Skinner said they worked to answers those questions and assuage fears.
Through First West’s partnership model, Island Savings will retain its employees, branches, brand, local decision-making and community investment program — effectively, it will become a wholly owned subsidiary of First West.
“We knew we had to clearly demonstrate and be up front with where we were going,” said Skinner in an interview. “But because we have been operating this way with Envision [Credit Union in the Fraser Valley] and Valley First [Credit Union in the Okanagan] for the past almost five years, we can demonstrate this is not just a vision we have, but it’s how we live it out.”
First West was created when Envision and Valley merged in 2010.
Skinner said the latest division, Island Savings, will continue to have its large regional administrative office in Duncan, as Envision does in Langley and Valley in Penticton.
“Our commitment is to keep jobs and employment [locally],” she said.
Three current Island Savings directors, Mark Aston, Richard Hill and James McKenzie, will be appointed to the First West Board.
The approval of the merger automatically activates a $2-million Island Savings Community Endowment that was announced in October. Housed at the First West Foundation, funds granted from this endowment will benefit local charities and initiatives in the communities that Island Savings serves.
Island Savings boasts 49,000 members and manages a portfolio of $2.8 billion.
First West is B.C.’s third largest credit union with 177,000 members at 38 branches and $7.7 billion under administration.