7 Watching for a V, U, W or K
Dennis Holthaus of SkywayCapital Markets discusses thestate of CU bank acquisitionsand how it relates to possibleeconomic recovery scenarios.
6 Recovering From LostMerger Momentum
While the pandemic hasinterrupted CU merger activity,there’s hope it may resume itsusual pace in 2021.
8 Using Data in Your M&ADecisions
Clear Core’s Ray Ragan and T.
“Buck” Strasser explain how datacan help reduce uncertaintywhen planning for a merger.
11 Assessing 2020 Trends andthe 2021 Outlook for CUMergers
ALM First’s David Ritter takesa deep dive into the impacts ofmarketplace uncertainty on CUmergers and what lies ahead.
14 Thinking Beyond theBoomer CEOs
OM Financial Group’s KirkKordeleski and Tim Strandquisthelp prepare CUs for the nextgeneration of CEOs.
Editor’s Column ...................4Focus Report.................... 6-12Guest Opinion ................... 14Community News............... 15People .............................. 19DepartmentsEDITOR'S COLUMN
A Surprise 2020 Pandemic Byproduct: Transparency
really can’t imagine trying to date amid this pandemic. Picture it: You’ve finally re- covered from a bad breakup
and decide that 2020 is going to
be “your year” to put yourself out
there. All of a sudden, your options
have dwindled down to A) Endless
Face Time “dates” and socially-dis-
tanced, masked walks in the park,
both of which don’t allow you to
judge whether that crucial, in-the-
flesh chemistry exists, or B) Go-
ing about your dating life as if the
pandemic doesn’t exist and risking
catching COVID from someone
who “forgot” their wallet at dinner.
However, after really thinkingabout it, I realized that 2020 ro-mance-seekers have an advantagebecause there’s no room for game-playing. First, you can find out immediately what someone’s stanceis on COVID protocol (tip: If theysuggest meeting at their place rightaway, it probably isn’t in line withyours). Second, if you make it clearthat you want to spend time gettingto know a person by phone/at a safedistance first, and only get physically close after you’ve both quarantined and tested negative, you’lleasily weed out anyone who isn’tserious about a relationship.
In this year’s dating world, unless you don’t care about catching or spreading COVID, there’sno space for small talk, casualencounters, secret side pieces orpost-hookup ghosting. Our currentcircumstances have forced people– or at least given them a goodexcuse – to be transparent, lay alltheir cards on the table, and gathera lot of information about someone before deciding if they’re evenworth a hug or handshake.
This epiphany came to mind lastweek as I was speaking with CUBusiness Group CEO Larry Middleman and COO Rachel Snydervia Zoom, ahead of the Portland,Ore.-based CUSO’s first virtualconference, about what it’s like forcredit unions vetting businessesto lend money to this year. Theyshared positive news about creditunion business services amid thisyear’s economic upheaval, including increased transparency between credit unions and prospective business borrowers.
“Now is a great time to be a lend-
er. If you’re thinking about granting
a loan, you have the opportunity
to ask all the questions you want,”
Middleman said. “You can ask
about their COVID business plan,
look at trends and see how that
business has survived over the last
six months, and what their forecast
is and how realistic that is. And in
this low-rate environment, you
have a very compelling sales pitch,
because the business can save
money on their debt payments.”
The pandemic has also given
credit unions an opportunity to shift
their focus to businesses that are
most likely to survive – for example,
commercial real estate properties
that house storage units or manu-
facturing businesses instead of
retail stores. “They have the ability
to reassess different industries and
readjust their focus from what it
may have been at the beginning of
the year – and become aggressive in
going after the business and being
the one to do the refinance, instead
of losing their member to someone
else’s refinance,” he said.
When the pandemic hit in March,credit unions granted loan paymentdeferrals to panicked businessowners left and right, wondering ifthey were heading toward the edgeof a cliff and would soon be bracingfor a fall when government assistance ran out. The great news: Thatdrop-off hasn’t been as big of anevent as some feared for the creditunions that work with CUBG, whichare primarily involved in commercial real estate.
“Of all the credit unions I talkedto, the borrowers that requesteddeferrals have not come back for asecond request,” Middleman said.
“The types of businesses mostcredit unions serve really aren’t thefolks that felt the biggest impact ofthe pandemic, so they’ve been a bitinsulated,” Snyder added. “Where itwould hit the credit union is if, forexample, a real estate investor whoowns a small strip mall asks for adeferral.” And so far, those types ofborrowers have not asked for deferrals beyond their original 90-day orsix-month requests; however, Snyder warned, it’s still early.
As the pandemic pushed workers
who had the ability to perform their
jobs from home offsite, some of
these commercial property owners
have seen their tenants’ offices sit
unoccupied. At this point, many of
those office building tenants intend
to bring their remote workforce
back onsite when the pandemic
is over and have maintained their
leases. But again, it’s still early. It’s
November, and many employers
believe their workforce will be back
to their pre-pandemic routines by
the end of 2021. That may seem
realistic now, but remember when
back in April we all shuddered at
the thought that we might have to
“do this” until Memorial Day?
“Over the next few months,we’ll start to see how long peoplecan continue to live off their cashreserves and make up for lostrents,” Middleman said. “For businesses where the forecast is not sopositive, they may say, you know,I’ve been supporting this for sixmonths and I’m done.”
In 2019, CUBG shared thatone goal credit unions had in thebusiness services space was toincrease deposits – and perhapsthey should have been carefulwhat they wished for.
“We did increase deposits, butit wasn’t a result of selling moreproducts and services to businesses, or strengthening thoserelationships,” Snyder said. “Theinflux of deposits from businesses was really tied to the stimulusmoney, or because the creditunion was able to help with thePPP loan so they decided to movesome funds into the credit union.”Still, the Paycheck ProtectionProgram (PPP) has enabled creditunions to act as knights in shiningarmor for many business owners this year. While CUBG didn’tdirectly process any PPP loans (ithistorically has not focused on
Small Business Administration
loans), it assisted by providing
guidance, expertise and clarifi-
cation to credit unions that took
on the task of making them. The
program allowed cooperatives to
shine – according to data supplied
by CUBG, banks made the most
PPP loans (4.4 million for a total of
$496.7 billion), but credit unions
came in second with 196,010
loans for a total of $9.7 billion.
“One of those silver linings is that
credit unions were able to use this
opportunity to be the hero, and re-
ally come through for some of these
EMAIL comments email@example.com businesses and get these PPPdollars out,” Snyder said.
Just as we’ve had to settle for virtual connections in our personallives this year, CUBG, like othercredit union organizations, waschallenged with recreating its annual in-person conference online.Snyder noted that the CUSO considered cancelling its conferencesaltogether, but decided to make ithappen virtually because “thingscouldn’t just stand still.” Many of ushave felt the same when it comes toconnecting with others outside ofwork this year – once we realized wewouldn’t be “going back to normal”any time soon, we embraced Zoomand Face Time to create new friendships and relationships.
There were benefits to the virtual conference format for CUBG.Because no one had to travel, itdrew a record 600 attendees andlanded an all-star speaker lineup.And even when it’s safe to holdevents in person again, the CUSOmay host its conference as a hybrid onsite-virtual event to maintain some of those benefits.
One lesson many of us havelearned this year is that virtualmeetings are valuable even whenwe’re not in a pandemic. For example, executives who realizedmeetings can be just as effectiveover Zoom as they are in personmay choose to save their money onflights and hotels indefinitely. Anda friend of mine who has been braving the COVID dating world toldme she plans to continue screeningmen over Face Time before meetingin person going forward (and she’sabsolutely right – why drive all theway across town when you couldhave found out from your livingroom that the photo in someone’sdating profile is 20 years old?).
2020 has brought tragedy anddisappointment, but despite that,let’s focus on the things we maynot have tried if we hadn’t livedthis year in a state of emergency –namely, that being open, honestand transparent with one anotherfrom the get-go is good for us. n