Traverse City-based Members Credit Union has announced a plan to partner with Bay Winds Federal Credit Union of Charlevoix – a move that will take its assets from $225 million to a combined $400 million with 75,000 members.

The deal will make the new financial institution the "largest local credit union north of Midland/Mt. Pleasant," Members' President/CEO Andy Kempf tells The Ticker. If approvals go as planned, the merger will take effect at the end of October, at which time a new name will also be announced.

Kempf says neither organization was actively pursuing a partnership in the industry, but due to increasing competition in the marketplace both were "looking at branches in each others' backyards." That led to investigation of a merger based on enhanced products and services for customers. Both credit union boards recently approved the action following third-party review.

The agreement requires a vote of the Bay Winds membership (approx. 29,000) – because it is merging into Members and giving up its federal charter for a state charter – and consent from the Michigan Office of Financial and Insurance Regulation and the National Credit Union Administration.

Kempf says the merger will create cost savings and efficiencies through the combining of resources but no staff layoffs are planned.

Members Credit Union has four branch locations in Traverse City, plus a lending center and mortgage center, as well as branches in Kalkaska, Mancelona and Manistee. Its coverage area will now extend along the coast from Manistee north to the bridge, encompassing 11 counties.

Bay Winds CEO/President David Leusink, who has 25 years of experience in the industry – the majority at Bay Winds – has been tapped to lead the new organization as CEO while Kempf will serve as president. Kempf joined Members Credit Union as CEO/president in January 2013 and previously was CEO of a financial institution in Grand Rapids. Members' board of directors chair Michael Slater will head the new combined board, with his counterpart on the Bay Winds board, Bridget Brown-Peters, serving as vice chair.

This is the second major deal in the local financial services industry so far this year. In March, Northwestern Bank announced it had been sold to Midland-based Chemical Bank in an all-cash, $120 million transaction. The deal is slated to be final this fall.