Coast Capital Savings and Surrey Metro Savings, the second and third largest credit unions in Canada, today announced that their boards of directors have signed a letter of intent and agreed to join together to create a single credit union.

The new merged credit union will be locally-owned, financially strong and will reach 90% of the population of the B.C. Lower Mainland and southern Vancouver Island. It will be Canada’s second-largest credit union in terms of assets, and the largest credit union in terms of membership.

As part of the merger, non-voting shares of Surrey Metro Savings will be purchased from the existing holders at a price of $21 per share and will be de-listed from the TSE upon successful closing of the transaction.

“Both boards want to create a larger credit union that will preserve our common values, especially our member service culture, while further strengthening the credit union movement in British Columbia,” said a joint statement by the board chairs Bill Wellburn of Coast Capital Savings and Tom Kirstein of Surrey Metro Savings. “As friendly neighbours who already co-operate in many areas, we believe the two credit unions are a perfect fit.”

Coast Capital Savings, formed by a merger of Richmond Savings and Pacific Coast Savings effective December 31, 2000, has a network of 25 branches on Vancouver Island and the Mainland.

Surrey Metro Savings, headquartered in Surrey, has 17 branches spanning the Fraser Valley. Together, they have approximately 2,000 employees, almost 300,000 members, and over $6 billion in assets.

In addition to being neighbours and having virtually no branch overlaps, the two credit unions are financially strong, of comparable size, and place the same high value on excellent member and employee relations. In recent industry surveys, Coast Capital Savings was named one of the 50 best-managed companies in Canada, and Surrey Metro Savings ranked in the top five in a list of Canada’s 50 best organizations for which to work.

The merger requires a 66-2/3% vote in favour from Surrey Metro Savings members, as well as the holders of its non-voting shares. Information relating to voting and the background of the transaction will be mailed to those two groups near the end of April.

Coast Capital Savings members will not be required to vote on the merger since the proposed transaction is a transfer of assets from Surrey Metro Savings to Coast Capital Savings. The merger will be placed before the Surrey Metro Savings members and non-voting shareholders for consideration on May 22, 2002.

The merger is also subject to Coast Capital Savings and Surrey Metro Savings entering into a definitive business combination agreement in respect of the merger, and receipt of all requisite regulatory, creditor, and third party approvals. If all approvals are received, the merger is expected to become effective at the end of June, 2002.

As part of the merger, Surrey Metro Savings membership shares will be exchanged for shares in Coast Capital Savings. Surrey Metro Savings members will automatically become members of Coast Capital Savings, and Coast Capital Savings will acquire all the assets and liabilities of Surrey Metro Savings.

The two Boards have guaranteed no layoffs of employees at the branch level of either credit union. There will be some consolidation of positions at the head office level. The process of managing this change will be fair and flexible and will make maximum use of retirements and normal turnover.