Connect First and Servus Credit Union begins a new era benefiting from merger

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EDMONTON, Alberta, Oct. 03, 2024 (GLOBE NEWSWIRE) — Following the historic merger between Servus and connectFirst Credit Unions, newly formed Connect First and Servus Credit Union Ltd (CFSCU) are celebrating their first reporting period in sound financial health. The merger was completed on May 1, 2024.

Through the merger, CFSCU has become one of the largest and strongest credit unions in Canada. Despite operating in the high interest and inflation environment that all Albertans face, the credit union achieved a healthy balance sheet and steady growth in the quarter, which covers the period May 1 through July 31, 2024.

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“I am pleased to share the results of our first joint financial report, which indicates that we have begun to realize the financial benefits expected from the merger,” says Ian Burns, president and CEO of both the new CFSCU and the former Servus Credit Union. “Our goal as a combined organization is to now thoughtfully begin offering the additional benefits of the merger while maintaining financial responsibility, and bringing the credit union way of banking to more Albertans.”

CFSCU results for the nine months ending July 31, 2024 show:

• Total assets $29.0 billion
• Loans worth $24.8 billion
• Deposits worth $24.1 billion
• Retained earnings $1.2 billion
• Provision for credit losses of $61.8 million, which includes a one-time merger-related adjustment of $12.9 million
• Operating costs: $397.7 million
• Income before income taxes: $94.1 million

The financial results include accounting adjustments related to the merger that have a temporary impact on CFSCU. The adjustments are primarily due to the rising interest rate environment and requirements to value assets and liabilities at fair market value. The increase in operating income this quarter was primarily due to $23.9 million in merger-related accounting adjustments. Normalized income before income taxes excluding these adjustments is $70.2 million.

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While housing prices in Alberta are trending higher due to tight supply, the province’s relatively low cost of housing continues to attract immigrants from more expensive parts of Canada. The province has also shown strong economic growth in various sectors, supported by the increasing population.

Despite these positive economic trends, job creation in Alberta has begun to wane, and headwinds to inflation and interest rates remain. CFSCU members and all Albertans are facing the brunt of rising prices that have contributed to higher credit losses. However, interest rate easing from the Bank of Canada is expected to continue for the remainder of 2024 and into 2025.

“Despite financially uncertain times, our combined credit union is more committed than ever to standing by our cooperative principles, serving our members, and building stronger communities,” Burns says. “We expect to continue our growth strategy by focusing on providing our members with the best financial advice, while limiting our loan losses by making wise decisions and remaining cost-conscious.”

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Servus and connectFirst are trading names of Connect First and Servus Credit Union Ltd. All rights reserved.

About Servus Credit Union Ltd.
Servus Credit Union has served Albertans for over 80 years with a full range of secure financial services. The financial institution has more than 100 branches in 61 communities across the county as well as online, mobile and phone banking options. Servus’ lofty goal is to help members reimagine their financial fitness so they can feel better about their money. For more information about Servus, call 1.877.378.8728 or visit servus.ca.

About ConnectFirst Union Ltd.
ConnectFirst Credit Union, one of Canada’s largest and most successful credit unions, is a full-service financial institution with more than $7 billion in assets under management. ConnectFirst employs 750 Albertans who provide a broad range of financial products and advice in more than 40 communities across central and southern Alberta. Serves more than 125,000 members with a community-focused approach to banking.

Media Contact:
media@servus.ca
825.402.0740

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