With a continued desire to meet the changing appetites of the marketplace, officials at Spokane Valley-based Horizon Credit Union and Boise-based Icon Credit Union say 2020 is a good time to merge fully.

“We actually merged a branch (in Coeur d’Alene) with Icon in 2012,” says Horizon CEO Jeff Adams. “They thought that was a reach to service out of Boise, so we worked a deal and merged that branch into our Coeur d’Alene branch.”

Pending federal approval, the complete pairing of the two will create a credit union with managed assets of roughly $1.5 billion. 

Horizon’s assets totaled $1.08 billion as of Sept. 30, up from $1.06 billion a year earlier, while Icon had total assets of $326.2 million as of Sept. 30, up from $293.1 million a year earlier, according to the latest financial reports filed with the National Credit Union Administration.

While fourth-quarter reports haven’t been filed yet, Adams says Horizon finished 2019 with a little more than $1.1 billion in managed assets, while Icon had $350 million.

Regulatory approval could be granted near the end of the second quarter of the year or early in the third quarter, he says.

A merger between the two would result in a credit union with more than 100,000 members. Horizon currently has 76,000 members, and Icon has 25,000, Adams says.

Adams says the move is not an acquisition.

“It’s not a takeover, and neither is paying any premium to the other,” he says. “It’s two credit unions putting their balance sheets together.”

The proposed merger would mark the sixth since he took over as CEO. While assets and services merged, the names of the other credit unions went away.

However, employees stayed. Adams says there won’t be layoffs upon approval of the merger. Horizon has approximately 260 employees, while Icon has about 110, he says.

The two credit unions’ prior working relationship ultimately helped serve as the genesis for the transaction, he says.

“We’ve known them for a long time and have worked on a few different things over the years,” he says.

Adams says merger talks began increasing last year.

“We have some technologies that they thought would be really attractive for their membership; where maybe we’re a little bit stronger in e-services,” he says.

For its part, Horizon has been expanding its presence across the Inland Northwest for some time now. Horizon currently has a total of 19 branches in its three-state footprint.

The credit union has Washington branches located in Spokane, Deer Park, Colville, Davenport, Ephrata, and Moses Lake. In Idaho, the credit union has branches in Coeur d’Alene, Post Falls, and Sandpoint. And in Montana, the credit union has a branch in Missoula and another in Butte, Adams says.

Icon has a total of nine branches located across Idaho’s Treasure Valley and in Eastern Oregon, he says.

Connie Miller, Icon’s president and CEO, in a press release, says “We have the opportunity to gain the competitive advantage and other digital capabilities of a larger organization while maintaining the personal service of a local credit union.”

Under the terms of the proposed merger, Adams will serve as president and CEO of the overall operation while Miller will serve as a regional president.

Horizon was founded in 1947 as a member-owned credit union while Icon was chartered in 1952, originally to serve employees of the Idaho Department of Highways.

The two credit unions last year were recognized among the top 200 healthiest credit unions in the country by DepositAccounts.com, a subsidiary of Lending Tree.

The credit union’s future name hasn’t been determined, says Adams.

Other credit unions that merged during his tenure as CEO include the former Spokane-based Amicus Credit Union and United Health Services Credit Union; Moses Lake, Washington-based Columbia Basin Federal Credit; EdTech Federal Credit Union, in Butte; and Montana First Credit Union, in Missoula. All now operate under the Horizon name.

Credit union mergers and bank acquisitions are an industry trend that Adams doesn’t see ending anytime soon.

“I don’t know that it’s a good or a bad thing. I think it’s an inevitable thing in the current financial landscape,” he says. “It takes more scale to provide your members the services that they want.”

Consumers want access to their financial information through such a wide array of channels that it has become increasingly necessary for institutions to pool their resources.

“They want electronic services, they don’t want the branches to go away, they want a contact center they can reach out to 24/7,” he says. “They want it all.”

“I think there’s a little misperception that the branches are going away,” he says. “They’re not.”

What is occurring in the branches, however, is profoundly different than in the past, he says.

“It’s more relationship driven and less transaction driven,” according to Adams. “But that’s an expensive proposition to provide services in so many different channels.”

Meeting regulatory requirements also contributes to costs for financial institutions.

“I think what we’re seeing is the natural evolution of the system,” he says.

Employees committed to member services constitute the largest segment of staff, he says.

“The trend, though, when we look at grouping, is that admin is growing faster than branch staff,” Adam says. “That’s due to those changing channels.”

Information technology departments and contact staff centers are among the fastest-growing departments within the credit union, he says.

A Spokane native, Adams, a graduate of Lewis and Clark High School and Eastern Washington University, has spent his entire 35-year career as a Horizon employee.

“I started as a teller and have worked in just about every area of the operation over the years,” he says. “There have always been opportunities here, and I love what we’re doing.”