Since becoming CEO and president of Spokane Valley-based Horizon Credit Union in 2005, Jeff Adams has overseen eight of the 11 mergers in the financial institution's 77-year history.
While Horizon characterizes the transactions as mergers, many of them have elements consistent with acquisitions. For example, for its most recent merger with Great Falls, Montana-based Embark Credit Union in the summer of 2022, Adams became the president and CEO of the combined organization, while Embark President and CEO Deb Evans remained with Horizon as a regional manager.
Adams says the steady stream of M&A activity is in line with the credit union’s strategic vision to widen its footprint across state lines and procure resources that allow the organization to serve its members better. As a result, Horizon has doubled in growth about every five years, he says.
The credit unions that Horizon has absorbed over the years haven't been in distress, he says. Rather, they were performing well financially but weren't growing, which impeded their ability to improve services for their members.
“Credit unions need to continue to achieve scale because that’s one of the ways that you remain relevant,” he says. “Scale allows you to have more resources to really serve your members because they don’t just want more branches and e-services. They want it all.”
The number of credit unions has been decreasing over the years, while the market share and market presence of credit unions have been expanding rapidly. According to the National Credit Union Administration, at the end of 1990, the credit union system had nearly 13,000 federally insured credit unions with 61 million members. As of March 2023, NCUA reports there are a total of 4,712 federally insured credit unions with 136 million members.
Horizon, founded in 1947 as Kaiser Aluminum Employees Credit Union, has grown to 112,000 members with 32 branches across four states: Washington, Idaho, Montana, and Oregon.
According to the latest reports filed with NCUA, Horizon’s assets as of Sept. 30, 2023, totaled $2.1 billion, up from $2 billion a year earlier. It reported total loans of $1.7 billion as of Sept. 30, up from $1.6 billion the year earlier. Horizon’s net income for all of 2023 was $5.2 million, down from $8.1 million in 2022.
Adams attributes the higher net income in 2022 to the merger with Embark Credit Union, and the higher volume of lending that was still in effect before the Federal Reserve began to raise interest rates.
“In 2022, there was huge lending going on, which produces a lot of income," he says. "Post-merger, everybody felt the effects on the margins when you look at the 500 basis points of Fed (Reserve) increases."
Adams says he doesn't anticipate a strong lending environment in 2024, which in turn will slow down deposit growth. He expects moderate growth this year, and more growth in 2025 and beyond, due in large part to the credit union's historical performance, he says.
“If you go back most five-year periods, we’ve doubled in growth every five years,” he says. “I would expect us to continue that path forward.”
In 2019 for example, Horizon reported total assets of $1.1 billion. In 2014, it reported $620 million in total assets.
Horizon is headquartered in the Mirabeau neighborhood of Spokane Valley, at 13224 E. Mansfield. It operates six branches in the Spokane region and has about 430 employees throughout the organization. In Spokane, it employs 207, says Adams. Pre-pandemic, Horizon's three-story, 40,000-square-foot headquarters was bustling with about 150 people, he says. Now, the offices are occupied by about 50 employees while the rest work either entirely remotely or come into the office from time to time, he says.
Mergers also have contributed to a hybrid workplace. For example, in the summer of 2020, Horizon merged with Boise, Idaho-based Icon Credit Union, and some of the credit union’s administrative staff still is based there, he says.
“It doesn’t make a whole lot of sense to make everybody go into a Boise office and everybody to go into a Spokane office and then get on a Zoom call,” he says.
While the credit union currently doesn’t have any mergers on the horizon, Adams says he and his team look for organizations that aren't in distress and are performing well financially but might not be growing.
Adams, 62, joined Horizon in 1984 upon receiving a degree in business administration from Eastern Washington University. While his family owns Coeur d’Alene Tractor Co., Adams says he joined Horizon at a time when credit unions were starting to expand. Nearly 40 years later, he says retirement isn't on his mind.
“The fundamental premise of a credit union is helping people," he says. "That’s always something that resonates with me.”
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