On February 19th the Boards of Servus Credit Union, Community Savings and Common Wealth Credit Union unanimously agreed to submit resolutions to their respective memberships to proceed with an amalgamation of all three credit unions. The resolutions are to be brought for consideration at the March Annual General Meetings/Special General Meeting.

1: Why are Servus, Community and Common Wealth Credit Unions proposing an  amalgamation?

Each Credit Union is committed to enhancing member access throughout the province, and after some in-depth discussions, we found that we are very compatible, sharing similar core values and vision for the future.

We share the same emphasis on excellent member service, good management, leading edge employee work environments, strong community investment commitments and innovative profit sharing models.

Our businesses complement each other in many ways. With the exception of Edmonton and Calgary we are geographically separated meaning there is minimal overlap of service areas or memberships. All three credit unions enjoy a strong market share in the markets we primarily serve, and opportunity to grow share in the new markets we have each recently entered.

Each of the three Credit Unions has a compelling business case for merging to better serve members. We also have one when it comes to investing in future technology, developing new products and services, and, most importantly, ensuring we can find the people we need to grow despite tight labour markets.

The bottom-line is that this amalgamation would provide members with access to personal services never before available to them.

2: Why are we using 'amalgamation' versus 'merger' in this initiative?

The Alberta Credit Union Act has no reference to mergers, only amalgamations so technically this is the term that we use as credit unions. As more people are familiar with the term merger, we have used these interchangeably.

3:  What are the legislative and competitive changes that are causing us to think about an amalgamation?

In 2006, the provinces of Alberta and British Columbia entered into a free trade arrangement called the Trade, Investment and Labour Mobility Agreement (TILMA). This will apply to provincially regulated financial services, including credit unions, in 2009.

Basically, a fully implemented TILMA means that BC credit unions will be able to offer services in Alberta and that we would be able to do the same in BC. When this occurs, it is very important to us that those coming into Alberta do not have regulated advantages. Currently, BC credit unions follow different regulations than we do. For example, they have:

• Higher level of business powers such as the ability to own insurance agencies and undertake leasing, both of which provide significant non-interest and non-fee revenue, and
• Less demanding regulation when it comes to lending parameters, capital requirements, and other fundamental operating practices, which present fewer restrictions.

Of course, Alberta credit unions have an advantage that BC credit unions do not. For instance, we have a 100% deposit guarantee, while BC guarantees up to $100,000. This is not something we are willing to negotiate away as we encourage the Alberta government to allow Alberta credit unions to be able to compete on a level playing field in other areas.

The government has not yet indicated that this will occur and a larger organization may have greater influence before the 2009 TILMA implementation date occurs. At minimum, a larger credit union would have efficiencies that make it more successful in the new competitive environment, while providing the ability to take advantage of the opportunities TILMA presents.

National competition is also on the horizon. Ottawa is considering charters for co-operative banks that would be investor-owned like credit unions, but have powers to operate nationally. A merged credit union would be better positioned to compete with these organizations as well.

4. Will all the branches remain open?

Our locations in our overlapping communities are uniquely complementary. For instance, the Servus branch in Calgary is located in a different part of the city to those of Community Savings. Likewise, Common Wealth's two Edmonton branches are well positioned to provide better branch access when combined with branches now operated by Servus.

In addition, each of the three credit unions involved in this initiative has already demonstrated commitment to small market locations such as Elnora (Community), Mundare (Servus) and Dewberry (Common Wealth).

As long as members remain loyal and continue to deal with the local branch, all branches should remain economically viable into the foreseeable future. The new credit union is committed to maintaining, and wherever practical, opening new branch locations consistent with the core values and key business plans of the organization.

5. What is a nominee name?

The Amalgamation Agreement must reflect a corporate name or it cannot be presented to the membership for consideration. The nominee name for the amalgamated credit union is Servus Credit Union. This means that we are able to move forward with the resolution, and if it is endorsed by all three credit unions, then the Board will undertake a review of naming options and finalize the name of the new credit union by November 1, 2008.

6. How would this amalgamation affect me as a member?

Members would receive the same professional service from the same friendly faces at their local branch.

A significant advantage would be the ability to access branch services from 92 branch locations across 63 communities. This would provide access across the province, and from around the world using our electronic and telephone banking services.

With member service as the cornerstone of our operating philosophy, the new credit union would review its product and pricing strategy with the intent of providing great value for the member.

7. What is my role as a member in this decision?

The resolution to approve the amalgamation and related by-laws would be considered by our members at a general meeting and a two-thirds majority of those at the meeting would have to vote in favour of the resolution.

• Servus members will vote at their AGM on March 12, 2008.
• Common Wealth members will vote at their AGM on March 13, 2008.
• Community Savings members will vote at a Special General Meeting on March 18, 2008.

8. What is the voting process?

The Credit Union Act stipulates that a minimum vote of two-thirds in favour from those members voting at each Annual General Meeting/Special General Meeting is required to pass the resolution. Eligible voters must have been members of Servus Credit Union as of January 31, 2008 and no voting by proxy is permitted. Voting is typically done by a show of hands.

9. How would the new Credit Union be administered?

Board Members from each of the founding Credit Unions would continue to guide their respective Credit Unions until November 1, 2008 when the amalgamation would be finalized.

The new Credit Union would be represented by a Board of 12, with four Directors appointed from each of the credit unions' existing Boards. They would begin work in late March 2008 to prepare for the new organization.

The new Board would undertake the development of the new credit union. Their responsibilities would include

• Choosing a CEO,
• Designing the governance process,
• Naming the organization,
• Establishing a head office, and
• Developing profit sharing strategies.

10. Who are the Board members proposed for the new credit union if the amalgamation proceeds?

As noted above, under the proposed amalgamation agreement a new Board of Directors would be composed of four members from each of the three Credit Unions. Each Board has chosen 4 representatives as follows:

Common Wealth Credit Union

Doug Hastings
Merv Loewen
Greg Preston
Alison Starke

Servus Credit Union

Peter Elzinga
Peter Galloway
Bob Porozni
Penny Reeves

Community Savings

Bill Anhorn
Terry Cooper
Stan Odut
Lloyd Robinson

11. What happens to the Board members we have today?

Board members will continue to be responsible for the operation of their respective credit unions until October 31, 2008. Consequently, they will continue to act in their current roles until the amalgamation is finalized.

12. Who would be the new CEO?

The new Board of Directors would be responsible for appointing a CEO for the new Credit Union. It is anticipated that a new CEO would be announced in early May 2008.

13. What would happen to my Common Shares?

Common Share value is addressed in the Amalgamation Agreement and Bylaws which have been presented to the membership prior to the AGM on March 12, 2008. Copies are be available on our website and in all the branches. Should the amalgamation go forward, share policies for the new credit union would be defined by the new Board of Directors.

14. How would my Profit Sharing be affected?

The amalgamation would enable us to build an even stronger Credit Union over the coming years. We maintain a strong commitment to sharing our profits with our members and this means that you can be assured that the fundamental principles would remain the same.

15. How can we get more information?

A detailed Amalgamation Package as well as other information is available in Servus Credit Union branches as well as our website www.servuscu.ca. Questions may be submitted by email to: info@servuscu.ca or by phoning 496-2000 or 1-877-496-2151.

Servus Credit Union is also hosting 3 Member Info Sessions on Thursday, March 6 from 7:00 to 8:30 as follows:

Edmonton Entwistle St. Paul

Ramada Hotel Entwistle Community Hall St. Paul Seniors Centre

11834 Kingsway Avenue 4921 51 Street 4809 47 Street