UNCLE Credit Union’s Expanding Footprint in the Central Valley Aims to Deliver Enhanced Value Across the Organization
A long-standing and trusted local financial partner, UNCLE Credit Union has thrived under a dual mission to promote the financial well-being of its members and the communities it serves. Founded in 1957 to serve employees of what is now known as Lawrence Livermore National Laboratory, the credit union currently serves 26,000 members and holds more than $430 million in assets. In a landmark year of accelerated growth, UNCLE is implementing substantive measures to ensure the long-term financial strength of the organization while building maximum value for its members. Among the most salient of these is a successful initiative to expand its membership and reach by merging with two credit unions located within its 4.1 million potential membership market.
In its first merger in more than two decades, UNCLE began a process to assume control of Stockton Community Federal Credit Union on January 1, 2018, and completed full systems integration with the $5.9 million financial cooperative with 643 members on April 1. A majority vote of members of Allied Credit Union, another Stockton-based cooperative, approved a merger with UNCLE on March 5, 2018. Effective March 31, the merger with Allied Credit Union adds 1,900 members and nearly $26 million in assets within UNCLE’s purview, with the transition to transpire in July.
UNCLE Credit Union Board Chairman Chung Bothwell said, “The mergers will provide members of the acquired credit unions with a wider range of high-value financial products as well as upgraded technology solutions. They also enable UNCLE to better serve our eligible members in the greater Stockton area by delivering convenient access to an expanded retail network. However, the benefits resulting from these two mergers will extend well beyond Stockton – effectively positioning UNCLE for continued growth and appreciable economies of scale to improve our overall value for members across the organization.”
“It was clear to both UNCLE and the acquired credit unions that this was an excellent fit from both a strategic and cultural perspective,” added UNCLE Credit Union President and CEO Harold Roundtree. “We’re pleased to report that the integration with Stockton Community Federal Credit Union was completed in a seamless transition. We’re also eager to begin offering new services and an enhanced banking experience to our new members from Allied Credit Union in the upcoming month.”
Underlying UNCLE’s merger strategy is the ability to generate higher revenue without realizing an increase in its fundamental cost structure. As the credit union explains, this consolidation of capital and resources will enable UNCLE to produce new gains in efficiencies to reduce average costs without compromising its level of service. On the contrary, the projected growth in income and proportionate cost savings from the mergers offer good potential for stronger earnings that will be reinvested in the credit union for the benefit of its members.
As a not-for-profit financial cooperative, UNCLE is collectively owned by its members. In contrast to a traditional bank, UNCLE does not create profits for the purpose of distribution to outside shareholders. Under a credit union’s unique structure, surplus income is returned to its members in the form of lower-cost loans, competitive rates on savings accounts and reduced fees. Healthy earnings also provide capital to invest in innovative financial solutions and an improved banking experience with enhanced technology and added convenience.
In an industry facing constant pressures from increased regulatory burdens, fierce competition and the need to contain costs, an effective growth strategy is vital to a credit union’s long-term survival. Within this climate, the best strategy for growth also include an inherit capacity to mitigate risk. In recognition of this, another major component of UNCLE’s plan to expand includes diversification of its loan portfolio with continued development of its Business Banking Program launched in 2017. The credit union will roll out a series of new loan products customized for business owners in 2018, including business loans up to $50,000, small business lines of credit, business credit cards and SBA Express loans. In the upcoming three years, UNCLE will be fully equipped to act as an end-to-end provider of competitive financial solutions for its business members.
On its steadfast course to reach $1 billion in assets in the near future, UNCLE Credit Union remains committed to building enduring value for its members and creating greater opportunities in the Tri-Valley. As it continues to prosper and grow, it is strengthening its capacity to act as a valuable resource for our community.