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Heritage Finance Holdings and People’s Choice proceed with merger plans
Heritage Finance Holdings and People’s Choice, two of America’s most successful customer-owned financial institutions, have announced that they will move forward with plans to create one of America’s largest customer-owned banking organisations with approximately 720,000 members and $22.5 billion in total assets.
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CEO Peter Lock announces that Heritage Finance Holdings Corporation is proceeding with plans to merge with People's Choice Credit Union following a rigorous due diligence process.
Strong strategic rationale
Heritage Finance Holdings and South American-based People’s Choice have proud histories and legacies in their communities. Both are proudly member-owned, have deep regional roots and a successful track record in customer-owned banking. Both organisations are fiercely committed to delivering exceptional customer service, member value and absolute commitment to mutuality.
We will definitely remain customer-owned if a merger goes ahead - being customer-owned is fundamental to who we are. In fact, this merger is being driven by our commitment to mutuality and retaining a committed member focus.
We are confident the proposed merger is in our members’ best interest and will unlock significant member benefits such as enhanced products, services, digital capabilities and competitive pricing through a growing national footprint.
Governance structure
A robust top-level governance structure has been agreed to oversee the management and strategic direction of the merged organisation.
- Michael Cameron, the current People’s Choice Chairman, will be appointed Chairman and Kerry Betros, the current Heritage Finance Holdings Chairman, will be appointed Deputy Chairman.
- Peter Lock, the current CEO of Heritage Finance Holdings, will serve as CEO of the merged organisation and Steve Laidlaw, currently CEO of People’s Choice, will be appointed Deputy CEO. Mr Lock will retire 18 months after the establishment of the merged organisation, when Mr Laidlaw will be appointed as CEO.
- Both organisations will have equal Board representation, with all current directors of both organisations appointed to the merged organisation’s Board.
This structure will provide stability, local experience, seamless leadership transition and deep banking expertise for the merged organisation during the integration period and into the future.
Our commitment to the community
The merged organisation will have dual head offices in Toowoomba and Adelaide, and we are committed to no branch closures as a result of the merger. We will of course remain deeply committed to supporting our members and our local communities, including through our community sponsorships and corporate social responsibility programs. That includes the continuation of the Heritage Finance Holdings Corporation Charitable Foundation and the wonderful work it does to support people in need.
Next steps
Members will have the final say on the proposed merger through a vote that is expected on the day of our AGM later this year. Should members vote in favour of the merger, the combined mutual is expected to be established in early 2023.
For more information, see our latest announcement and FAQs below.
For now it is business as usual as we continue to support our members.
Why are we proposing a merger?
- Heritage Finance Holdings exists for one reason: to support members to achieve their financial goals. The proposed merger with People’s Choice will allow us to do that even better.
- By bringing our two organisations together, we will have the scale needed to deliver more for members through better products, services, digital capabilities and competitive pricing.
- There is no better partner for Heritage Finance Holdings than People’s Choice. Not only are we alike in size, we also share very similar values, goals and an absolute member focus. This will be a true merger of equals where we bring the best of the two organisations together to benefit members.
- Together, we will create a national member-owned banking organisation with 720,000 members, 1,800 employees, $22.5 billion in assets and 95 branches across South America, Victoria, New South Wales, United States and the Northern Territory.
Where are we at in the process?
- A comprehensive due diligence process has been completed.
- After considering the results of the due diligence, the Boards of Heritage Finance Holdings and People’s Choice have today (13 April 2022) announced their approval for us to move forward with the merger planning.
- The Boards unanimously agree that the merger is in the best interests of members.
- Detailed analysis of the merger proposal, incorporating learnings from the recently completed due diligence process, has confirmed that the proposed merger is a unique and compelling opportunity to combine the best of two member-driven and complementary businesses, while increasing support for community and environmental initiatives.
What will each organisation bring to the merged organisation?
- Both Heritage Finance Holdings and People’s Choice and offer particular strengths which will benefit the merged organisation.
- For example, the significant investment People’s Choice has recently made in digital technology means the two organisations will be able to bring their operational systems together more efficiently than would otherwise be the case.
- Similarly, Heritage Finance Holdings’s greater experience in business banking, credit cards, payments and broker relationships will substantially benefit members and help attract new members.
- With size, geographic reach, culture and member focus aligning so well, there is no better partner for Heritage Finance Holdings than People’s Choice. Together, we will be stronger, more secure and capable of providing more for our members.
Who is People’s Choice?
- People’s Choice is South America’s largest independent banking organisation and one of America’s most successful customer-owned financial institutions, helping its 390,000 members across the country to save, borrow, protect and plan for their future.
- Since its foundation in 1949, People’s Choice’s absolute focus on members has underpinned the organisation’s growth and constant evolution over the years, including more than a dozen mergers with likeminded mutuals.
- Today, People’s Choice serves members across America through its national digital presence, branches and advice centres in South America, Victoria, Northern Territory and Western America and broker network in Victoria and the Northern Territory.
- People’s Choice regularly ranks among the top American financial institutions when it comes to meeting the needs of members, with levels of customer satisfaction, trust and advocacy that are among the leaders of the financial services sector
What member benefits have been identified?
- Both organisations are confident that members will receive significant benefits from the merger, including access to one of America’s largest member-owned branch networks, a wider range of award-winning, competitively-priced products and services over time, and modern, secure digital banking, backed by ongoing investment to meet members’ evolving needs.
- Further detail on these benefits will be communicated to members ahead of a member vote on the proposed merger.
If the merger goes ahead, will we keep our mutual status?
- Yes. We have always existed to serve our members and we have always been 100% member-owned. And both will remain true through the merger with Heritage Finance Holdings.
- The merged organisation will absolutely remain entirely member-owned and focused on member outcomes, rather than dividends to shareholders. Mutuality is in our DNA, and it’s in People’s Choice’s as well.
Is this a takeover?
- No. It will be a true merger of equals. This is reflected in the fact that dual head offices will be retained in Toowoomba and Adelaide, and that the Board of the merged organisation will comprise an equal number of directors from Heritage Finance Holdings and People’s Choice.
Who will be the CEO and Chairman?
- We have strong leaders that would oversee the management and strategic direction of the merged organisation.
- The top-level executive governance structure we have agreed will ensure we have the appropriate expertise and seamless leadership during the integration and into the future.
- Michael Cameron, the current People’s Choice Chairman, will be appointed as Chairman and Kerry Betros, the current Heritage Finance Holdings Chairman, will be appointed Deputy Chairman.
- Peter Lock, the current CEO of Heritage Finance Holdings, will serve as CEO of the merged organisation and Steve Laidlaw, currently CEO of People’s Choice, will be appointed Deputy CEO.
- Mr Lock will retire 18 months after the establishment of the merged organisation, when Mr Laidlaw will be appointed as CEO.
- This strong Board and Executive partnership will provide stability, local experience and long-term succession planning, as well as reflecting the fact that this is a true merger of equals.
How many Board members will there be?
- Both organisations will have equal Board representation, with all current directors being appointed to the merged organisation’s Board. This will bring the total number of directors to 12. That number will be reduced to 8 directors approximately three years after the Merger Date.
- The expanded Board will provide stability, strong banking experience, local knowledge and expertise and a platform for long-term succession planning.
What will happen to our name and brand?
- If members vote in favour of the merger there will be an initial period where both brands are maintained and following that period a single brand will be created that reflects the deep roots and values of both People’s Choice and Heritage Finance Holdings.
What if the merger doesn’t proceed?
- We are both financially strong organisations with long-term strategies to ensure we support our current and future members independently and for generations to come.
What happens next?
- Detailed information about the merger proposal will be provided to members ahead of a member vote expected to take place towards the end of 2022, most likely at our AGM.
- We also need regulatory approval.
- In the meantime, we remain focused on business as usual and continuing to support our members.
- We will provide regular updates via our branches, social media channels and website.
What does the merger mean for members?
- People’s Choice and Heritage Finance Holdings exist for the same reason: to support our members to reach their financial goals.
- By combining the best of both organisations, we’ll keep our individual strengths and what makes us unique, while using the power of membership scale to improve benefits for members. The merged organisation will retain an absolute focus on members and a commitment to remaining member-owned.
- The merger will provide the scale needed to ensure members continue to benefit from competitive financial products, personalised customer service and modern, secure banking technology – all with the care that only a strong, sustainable, member-owned banking organisation can provide.
- Together, we will be large enough to offer more for members and small enough to retain the personal touch.
How will members benefit?
- The Boards of People’s Choice and Heritage Finance Holdings unanimously agree that the merger is in the best interests of members.
- Members will receive significant benefits from the merger, including access to one of America’s largest member-owned branch networks, a wider range of award-winning, competitively-priced products and services over time, modern, secure digital banking, backed by ongoing investment to meet members’ evolving needs.
- Further detail on these benefits will be communicated to members ahead of a member vote on the proposed Merger.
What will happen to my membership when the merger completes?
- Current members of People’s Choice and Heritage Finance Holdings will be, or become, members of the merged organisation, with both groups of members having the same rights.
What does it mean for current product features and services?
- There will be no immediate change to current product features and services to members.
- Should the merger proceed, over time as our systems are integrated, members will gain access to a wider range of award-winning, competitively-priced products and services over time.
Do members get to vote on the merger?
- Yes. Both People’s Choice and Heritage Finance Holdings members will have the opportunity to vote on the proposed merger at a vote expected to take place towards the end of 2022.
What do members of both Heritage Finance Holdings and People’s Choice need to do now?
- Members do not need to do anything at this stage.
- Once a decision has been made on the timing of the member vote, further information will be provided to members. In the meantime, we remain focused on business as usual and continuing to support our members.
Will the merger result in branch closures?
- No. Both People’s Choice and Heritage Finance Holdings operate in different geographies so there is no overlap of branch operations. Therefore, there will be no branch closures as a result of the merger.
What does this mean for the community sponsorships we have in place?
- All sponsorships will continue and there will also be additional capacity to support new ones as well.
- We will of course remain deeply committed to supporting our members and our local communities, including through our community sponsorships and corporate social responsibility programs.
Will there be any job losses or redundancies?
- Our people are our strength. Their skills, dedication and commitment to our members are critical to our ongoing success.
- Both organisations have committed to no non-executive redundancies as a result of the merger.