Garth Warner wants everyone to know that when it comes to offering value for financial services in Alberta, newly bulked-up Servus Credit Union Ltd. is at the front of the line.

After a challenging merger in late 2008 that saw three Alberta credit unions welded into one, Servus is now positioning itself as a leading player on the battlefield that is the financial services landscape. But no matter how hot the competition gets, Warner, president and CEO of Edmonton-based Servus, makes one thing crystal clear: Servus is not a bank. “We’re a credit union,” he says, “we’re absolutely proud to be a credit union and we have no desire to be anything other than a credit union.”

With 400,000 members and about 100 branches across the province, Servus now ranks as one of the largest credit unions in Canada. Its assets rose last year, an indication that the merger has been a success. And more change is coming.

Servus is overhauling its computerized banking platform and has recently launched a new, three-year business plan. Both initiatives are designed to build on Servus’s already strong market position, with an eye to improved efficiency, services and markets.

The newly expanded Servus formally entered the world in November 2008 in a merger of three of the four largest credit unions in Alberta at the time — Community Savings Credit Union of Red Deer; Common Wealth Credit Union of Lloydminster; and the former Servus Credit Union of Edmonton. Warner, who started his career with Servus almost 30 years ago, took over as head of the merged entity in April 2009, replacing former Servus CEO Steve Blakely, now retired.

While the decision to merge predated the 2008 financial crisis, it was driven by a general desire for greater stability. Says Warner: “We wanted to build a stronger credit union, one that would be big enough to weather whatever economic storms were to hit us.”

In an age when the resumés of senior financial services executives often feature gigs in a range of related sectors, the 52-year-old Warner is something of a purist. He joined Servus in 1981 as a loan officer in Edmonton and has been with the credit union ever since. He served as acting CEO, guiding the legacy firm’s daily operations during the merger, while Blakely stick-handled through the merger’s mechanics.

Warner is a vocal champion of the advantages that credit unions can offer, such as lower-cost services, and is dedicated to the notion that credit unions can thrive because of the alternative model they offer.

Amalgamations are never easy, but the process was made even more difficult because — unlike a traditional merger, in which one institution simply absorbs another — the Servus/Common Wealth/Community Savings merger granted each company equal representation on the 12-member board of directors, as well as equal decision-making powers, Warner says, regardless of the size of the institution prior to the merger.

The merged entity reviewed the operations of all three constituent companies and the broader credit union industry for best practices, and adopted those, Warner says: “We had to sit down and figure out how to do literally everything, because each of the three credit unions had done things in different ways.”@page_break@The merged board elected to retain the Servus name and head office in Edmonton. Servus had a high recognizability factor in the province and Edmonton’s size and location should help in recruitment and retention of talent.

Servus employs about 40 financial advi-sors licensed by the Mutual Fund Dealers Association of Canada. They work with members at the branch level, offering customers packaged wrap accounts and relatively basic financial planning. There is another team of approximately 35 MFDA-licensed investment specialists, who deal with wealthier members who need more specialized portfolios. There also are 16 to 18 investment advisors licensed by the Investment Industry Regulatory Organization of Canada. Servus hopes to boost its investment specialist and investment advisor ranks by 20% in 2011.

Despite a challenging merger and a serious recession, Servus’s outlook is positive. On July 31, the credit union reported assets of $10.8 billion, up by 8% from a year earlier. Warner credits Servus’s success to its commitment to its credit union “values and roots.” That includes gathering feedback from employees and involving them directly in decision-making, and investing in communities in which Servus operates, thus strengthening ties with its members.

Although much has been accomplished since the merger, Warner says, more remains to be done. The biggest project going forward will be creating a new, common computerized banking platform — one that wasn’t used before by any of the three legacy credit unions. The conversion process began in September, and is expected to take two to three years to complete.

“It will improve our productivity and our ability to respond to our market much more quickly,” Warner says. Indeed, the introduction of the new banking platform will mean fundamental change, at all levels. “There won’t be an employee left untouched,” he says, “in terms of the way they’re doing things.”

More change is coming with the launch of a three-year business plan that aims to broaden Servus’s geographical reach and increase its membership. Under the plan, Servus will continue to expand its branch network, including new branches in Red Deer, Calgary and Edmonton.

Another key part of Servus’ strategy to expand and diversify is to boost its wealth-management business, Warner says: “Wealth management is a great source of fees and other income, especially in times of margin squeeze.”

Credit unions have been hurt by the narrowing gap between interest paid on deposits and interest charged on loans. Wealth-management fees provide steady income when these margins narrow.

Although Servus has had its hands full in dealing with the merger, it is currently in the process of acquiring three smaller Alberta credit unions, pending approval by the members of those organizations.

However, growth by acquisition is not currently a prime strategy at Servus, says Warner: “The recent economic environment has put pressure on some of the smaller credit unions. We are not actively looking for acquisitions, but we will be there for the system. We won’t let a credit union fail.” IE