Picture of a lake

Details of the Proposed Merger

BlueShore Financial and Beem seek to combine their collective strengths in pursuit of a bold ambition to build a modern, province-wide credit union.  

A family of four walking through the forest with walking sticks

Structure and method of the merger

As approved by the Boards of Directors, elected by the members of each of BlueShore Financial and Beem, the Proposed Merger will happen by way of an asset transfer. This means Beem will acquire all of BlueShore Financial’s assets and will assume all liabilities of BlueShore Financial.

Upon completion of the Proposed Merger, BlueShore Financial will be dissolved as a legal entity, but its legacy, including use of the trade name “BlueShore Financial,” will continue in the merged credit union for at least 18 months after the Effective Date, or such other period as mutually agreed upon between the Chief Executive Officer of Beem and the President of BlueShore Financial, a division of Beem.

With combined total assets under administration of approximately $17 billion, the merged credit union will legally be known as Beem Credit Union; however, the former branches of BlueShore Financial will continue to operate under the trade name “BlueShore Financial” in the near term.
 

Key Provisions of the Asset Transfer Agreement

Below are the Key Provisions of the Asset Transfer Agreement (download PDF), which represent highlights of the full agreement.

Key Provision

Section

Summary

Parties

N/A

BlueShore Financial Credit Union (“BlueShore Financial”) and Beem Credit Union (“Beem”)

Effective Date of Merger

1.1(l)

January 1, 2025 (or another date as may be specified by the Superintendent of Financial Institutions).

Transition Period

1.1(aa)

The period beginning on the Effective Date and ending 18 months after the Effective Date, or such other period as mutually agreed upon between the Chief Executive Officer of Beem and the President of BlueShore Financial, a division of Beem.

Asset Transfer

2.1  

All rights, property and assets of BlueShore Financial will be transferred to Beem.

Liabilities

2.2

All obligations and liabilities of BlueShore Financial will be assumed by Beem.

Your Deposits

2.3

Beem will assume all deposit obligations of BlueShore Financial on a dollar-for-dollar basis as such deposits exist between each depositor and BlueShore Financial when the merger takes effect.

Share Exchange

3.1  

Shares of BlueShore Financial will be exchanged for shares of Beem as set out in Schedule “B”.

Right of Repurchase

3.2 and 3.3

Holders of Class C Investment Equity Shares of BlueShore Financial, if any, will have the right to have those shares repurchased for $1.00 each.

Representations and Warranties

4.1 and 6.1

Each of BlueShore Financial and Beem will make a number of representations and warranties to the other party as are customary in a transaction of this type.

Common Bond

6.1(d)

The merged credit union will not have a common bond of membership.

Employees

7.4

Employment matters will be dealt with as set out in Schedule “C”, as discussed further below.

Services

7.5 and Schedule “D”

The merged credit union will offer a full range of banking services for individuals, businesses and not-for-profit organizations, as more particularly described in Schedule “D”.

BlueShore Financial Branches

7.6

Subject to factors outside of its control, the merged credit union will continue operating the existing BlueShore Financial branches for at least the Transition Period (i.e., 18 months). Beem may vary the hours of operation of the BlueShore Financial branches after the merger (with advance notice to employees of the applicable branch) to better suit the members of such branch and the communities that the branch serves.

Offices

7.7

The head office and registered office of the merged credit union will be located at the current head office of Beem in Kelowna, BC.

The current head office of BlueShore Financial in North Vancouver, BC will remain operational as a regional administrative office for staff and administration processes for at least the Transition Period.

The records office of the merged credit union will be the offices of Edwards, Kenny & Bray LLP, in Vancouver, BC, or such other law firm or location as the merged credit union determines from time to time.

Directors

7.8

The Board of Directors of the merged credit union will initially be comprised of 18 directors, with all 14 current directors of Beem remaining directors of Beem post-merger. In addition, four legacy directors of BlueShore Financial will be appointed to the board of directors of the merged credit union as additional directors.

Of the four legacy directors of BlueShore Financial appointed as additional directors of the merged credit union, two directors will be appointed for a one-year term, one director will be appointed for a two-year term and one director will be appointed for a three-year term.

The length of time served as directors of BlueShore Financial will not be included in the calculation of time served as a director of Beem for the purposes of calculating term limits in accordance with Beem’s Rules.

Beem will pay each outgoing director of BlueShore who is not appointed as a director of the merged credit union $15,000 for ceasing to be a director.

President and Chief Executive Officer 

7.9

The current President and Chief Executive Officer of Beem will continue as the President and Chief Executive Officer of the merged credit union.

President of BlueShore Financial 

7.10

The current Chief Executive Officer of BlueShore Financial will be appointed as the President of BlueShore Financial, a division of Beem Credit Union, for at least the Transition Period.

Corporate Name and Trade Names

7.12

The corporate name of the merged credit union will be Beem Credit Union.

The merged credit union will operate under the trade names “BlueShore Financial”, “Gulf & Fraser”, “Interior Savings”, “GFCU Savings” and “North Peace Savings”.

BlueShore Financial Trade Name

7.13

During the Transition Period, the former branches of BlueShore Financial will be operated under the trade name “BlueShore Financial” (or a variation of such trade name).

After the Transition Period, the merged credit union may cease using the “BlueShore Financial” trade name if market analysis suggests it would be beneficial to the merged credit union or its members to do so, or if it is required by law to do so.

Subject Conditions

8.1,and 8.4 

A number of conditions must be met prior to the completion of the merger. These include, among others: (i) the filing of the executed Asset Transfer Agreement with BC Registrar; and (ii) obtaining all necessary approvals under the Competition Act (Canada).

Dissolution

8.7(c)

After completion of the merger, BlueShore Financial will be dissolved and all operations of BlueShore Financial will be continued by Beem.

Membership

8.7(c)

Each member of BlueShore Financial will become a member of Beem.

Membership Shares

Schedule “B”

Each Class A Membership Equity Share of BlueShore Financial will be exchanged for one Class “A” Membership Equity Share of Beem, up to a maximum of 1,000 shares.

Excess Membership Shares

Schedule “B”

If a member of BlueShore Financial holds more than 1,000 membership shares, the excess shares will not be exchanged, but the member will receive $1.00 for each share over 1,000.

Class C Investment Equity Shares

Schedule “B”

Each Class C Investment Equity Share of BlueShore Financial that is issued and outstanding, if any, will be exchanged for one Class “C” Investment Equity Share of Beem.

Jointly Held Class C Investment Equity Shares

Schedule “B”

If any Class C Investment Equity Shares of BlueShore Financial are jointly held by two or more shareholders, such shares will be exchanged for an equivalent number of Class “C” Investment Equity Shares of Beem that are not jointly held, with the total number of Class “C” Investment Equity Shares of Beem divided equally among the joint holders of the Class C Investment Equity Shares of BlueShore Financial.

Fractional Shares

Schedule “B”

Where the exchange of any shares of BlueShore Financial would result in the issuance of fractional shares of Beem, the fractional amount of such shares will not be exchanged for shares of Beem, but the amount of the fractional shares that cannot be exchanged (the “Excess Fractional Amount”) will be deposited in the shareholder’s demand deposit account with Beem.

If the shareholder does not have a demand deposit account with the merged credit union, the Excess Fractional Amount will be donated to a registered charity selected by the merged credit union, unless the shareholder has contacted the merged credit union by phone at 1.866.736.4334 or email at inquiry@beemcreditunion.ca within 30 days of the Effective Date to request that the merged credit union pay the Excess Fractional Amount to the shareholder. If the shareholder makes such a request, the shareholder will be able to pick up the Excess Fractional Amount from any branch of the merged credit union for a period of 90 days after the Effective Date. If the Excess Fractional Amount is not picked up by the shareholder within the 90-day period, the Excess Fractional Amount will be donated to a registered charity selected by Beem.

Employment Matters

Schedule “C”

It is intended that employees of BlueShore Financial will be offered a job with the merged credit union. No employee of BlueShore Financial who continues with the merged credit union will see a reduction in monthly salary or wages as a result of the merger. Length of service entitlements of employees of BlueShore Financial will be recognized by Beem.

Beem will offer employment terms that are substantially consistent with those of BlueShore Financial, and such terms will include equivalent (or better) salary and bonus opportunity and materially consistent provisions in relation to group benefits, vacation and time off, hybrid work options, staff banking and other similar matters.

Employees of BlueShore Financial who are participants of a defined benefit pension plan with BlueShore Financial immediately prior to the Effective Date will continue to accrue pension benefits and vesting service in accordance with the terms and conditions of such defined benefit pension plan.

A stack of 5 river rocks on a beach

Risks of the merger

The elected directors and the CEOs of BlueShore Financial and Beem assessed the risks of the Proposed Merger and concluded that the benefits outweigh the risks. The merged credit union will develop control and risk management policies and will track and mitigate risks.

Below are some of the key risks and impacts of the Proposed Merger.

Risk Potential impact Mitigation approach
Brand identity and community connection Risk of lost goodwill, brand identify and community connection. BlueShore Financial is a well-known brand in its market. Beem is not a well-known brand yet, however, it has a strong and compelling brand to share. Both credit unions have a strong dedication to their local communities. Post-merger, BlueShore Financial will retain its brand identity for about 18 months, during which period the merged credit union will engage with BlueShore Financial’s members to introduce them to Beem.
Costs of integration Risk of integration costs exceeding forecasts. The financial modelling for the merged credit union is conservative. To ensure expenditures are managed and desired outcomes are achieved, planning, budgeting, business cases, and project oversight will be implemented. Collaborating with reputable experts and aligning expenditures with strategic objectives will also help achieve the desired outcomes.
Credit union integration The risk profile of the merged credit union will in the near term endure heightened operational, reputational, and financial risks. The integration plan will schedule the BlueShore Financial integration to follow the completion of Beem’s ongoing integration of Gulf & Fraser and Interior Savings. This plan will emphasize change management, utilizing a proven governance model throughout the 18-month transition period, and will heavily invest in communication efforts. Beem has a dedicated integration team and processes, and a track record of successful integrations.
Cultural alignment Risks associated with integrating two different corporate cultures. Future operations will align with the vision for the merged credit union. By joining Beem early, BlueShore Financial can help shape the roadmap to achieve this vision. The merged credit union will adopt an inclusive approach for all employees, focusing on future growth.
Due diligence Risk that pertinent details (e.g., undisclosed liabilities) exist and the other credit union is unaware of this The due diligence process was comprehensive, incorporating external legal, accounting, and tax experts. Beyond these investigations, the Asset Transfer Agreement mandates that each credit union confirms the accuracy and completeness of the information provided during this process.
Employee engagement and change management Between announcements of the Proposed Merger to final implementation, employees could have a negative reaction to the uncertainty and potential impact of the Proposed Merger. The merged credit union will approach change management from both a project and organizational perspective. An experienced Organizational Change Management team will guide employees through the transition. This support will involve two-way feedback, proactive question resolution, collaboration opportunities, value alignment, a multi-faceted change strategy, frequent communication, transparent engagement, efficient training, and sustained adoption efforts.
Membership and Shareholder approval Eligible members and shareholders of BlueShore Financial will vote on the Proposed Merger, and each vote must achieve a minimum of 67% of votes in favour of the merger. If the Proposed Merger is not approved, the credibility and standing of BlueShore Financial and Beem may be impacted. BlueShore Financial’s Board of Directors has recommended voting in favour of the Proposed Merger for the benefits that it offers to members, employees, and communities. The credit unions are committed to engaging with members through ongoing communications, offering opportunities for feedback and two-way dialogue, to ensure the benefits of the Proposed Merger are widely understood.
Operational impacts Risk of merger activities impacting business operations and member service. We will use the transition period to thoughtfully plan our integration, adding dedicated employees from BlueShore Financial to the Integration Planning Team.
Synergies fail to materialize Historically not all credit unions have achieved the desired synergies. Cost reduction and efficiency are not the key drivers for this merger. The intent of the Proposed Merger is to increase scale, diversify revenue streams, create additional opportunities and provide a strong voice for the merged credit union, its members, and employees. The integration plans include key areas such as technology, and branding.
Technology and systems integration Risks associated with operating, integrating, and running multiple systems and platforms during the transition period along with the time it takes to complete integration. Wherever possible, Beem’s current infrastructure and systems will be utilized, aiming to gradually decommissioning BlueShore Financial’s systems and non-branch infrastructure. Retaining technology and business subject matter experts who support the banking core and enterprise data will be crucial for a successful integration.

Leadership of the merged credit union

Board of Directors

As of the effective date of the Proposed Merger, the initial Board of Directors of the merged credit union will consist of 18 directors, comprising the 14 current directors of Beem, and four legacy directors from BlueShore Financial. Although Beem’s Rules allow for up to 18 directors, the ideal size of the Board is a lower number of directors. Board terms for the BlueShore Financial legacy directors have been staggered to, along with the pre-existing staggered terms of the current Beem directors, help achieve this reduction while also ensuring there is representation from both BlueShore Financial and Beem.


The legacy directors of BlueShore Financial who will serve as additional directors of Beem and their initial terms are set out below:
 

Director Initial Term
Julie McGill One Year (expiring at the close of Beem’s 2026 AGM)
Lynne Charbonneau One Year (expiring at the close of Beem’s 2026 AGM)
Diana Chan Two Years (expiring at the close of Beem’s 2027 AGM)
Oliver Grüter-Andrew Three Years (expiring at the close of Beem’s 2028 AGM)

 

The following are the current Beem directors who will continue their current terms of office as directors of the merged credit union, subject to normal course changes through retirements and resignations:

Director Term Expiry
Bill Wilby 2026
Bruce Tisdale 2027
Christine Dacre 2027
Daniel Drexler 2025
Doug Sweeting, Board Chair 2027
Elmer Epp 2027
Karri Brinnen 2025
Lee Varseveld 2025
Linda Archer 2026
Nate Hampson 2027
Reg Foot 2025
Rob Shirra, Vice Chair 2027
Tracey Scott 2026
Tracey Wolsey 2026

 

For director biographies and Board Committees, please refer to the Supplemental Information Package.

Executive Leadership

Beem’s organizational structure will remain in place after the merger, with the current president of BlueShore Financial being added to the Beem executive team to lead the BlueShore Financial division of Beem. The following are the biographies of the merged credit union’s expected executive team, effective as of the effective date of the Proposed Merger. 

Brian Harris

Brian Harris

President and CEO

Ian Thomas

Ian Thomas

President of BlueShore Financial, a division of Beem Credit Union (Transition period)

Sue Britton

Sue Britton

Chief Innovation Officer

Dave Colic

Dave Colic

Chief Technology Officer

Maggie Sinclair

Maggie Sinclair

Chief Growth Officer

Tara Collins

Tara Collins

Chief People and Culture Officer

Ron Lee

Ron Lee

Chief Financial Officer

Karen Hawes

Karen Hawes

Chief Relationship Officer

Mary-Lynn Baker

Mary Lynn Baker

Chief Integration Officer

Scott Betts

Scott Betts

Chief Risk Officer

Merger and Integration costs and synergies

The merged credit union is expected to achieve positive net financial results over the projection period on a combined basis, along with significantly greater size and scale, forecasted to grow to $20.2 billion in total assets under administration at the end of Year 5. The merged credit union is forecast to contribute $382 million in profits to retained earnings over the 5-year projection, thereby enhancing the capital base with a solid foundation to support members and further investments in our communities and business.

(See Cautionary note regarding forward-looking statements.)

Merger integration costs and synergies

The cumulative Operating Income and Net Income benefit over the 5-year projections are $28.8 million and $23.9 million, respectively. The integration costs are generally one-time in nature, while many of the synergies will continue to have a benefit beyond the projection time horizon in perpetuity, which increases the overall financial benefit of the Proposed Merger. The largest category is for salaries and benefits involving the possible exercise of executive change of control agreements, retention costs and assumed attrition savings over time. The main highlights, by income statement category, of the integration costs and synergies are as follows:
 

Merger Integration Synergies (Costs) ($ 000s) Year 1 Year 2 Year 3 Year 4 Year 5 Total
Financial Margin

676

2,027

2,702

2,702

2,702

10,809

Impairment Charges on Loans 

(560)

(560)

-

-

-

(1,120)

Non-Interest Income

672

1,276

663

725

585

3,921

Non-Interest Expenses:          

 

Salaries & Benefits

(2,309)

1,921

5,750

5,869

5,992

17,223

Data Processing/Information Technology

(510)

(3,300)

786

806

827

(1,391)

Premises & Equipment

(1,745)

-

-

-

-

(1,745)

Depreciation/Amortization

-

-

(120)

(120)

(120)

(360)

Advertising & Promotion

25

(555)

(205)

(45)

5

(775)

Professional Services

-

-

40

40

40

120

Other

277

408

477

525

470

2,157

Total Non-Interest Expenses

(4,262)

(1,526)

6,728

7,075

7,214

15,229

Operating Income (Loss)

(3,474)

1,217

10,093

10,502

10,501

28,839

Income Taxes Recoveries (Expense)

591

(207)

(1,716)

(1,785)

(1,785)

(4,902)

Net Income (Loss)

(2,883)

1,010

8,377

8,717

8,716

23,937

Financial Summary

Below is the five-year summarized combined financial projections for the merged credit union. These projections consider the economic environment, expectations for growth, and alignment of operations, and recognize incremental integration costs and synergies that are expected to be incurred over the five-year horizon. It is important to note that this financial model is not intended to reflect a business plan, tactical plan, or strategic plan. Rather, it is developed conservatively, and there may be opportunities to further grow assets and operating income.

Loans are modelled to increase to $13.1 billion at the end of Year 5 and deposits to $13.7 billion. By the end of the 5-year projection period, members’ equity exceeds $1.1 billion, and total assets under administration are more than $20 billion. Net integration costs and margin compression contribute to an expected operating loss of $11 million in Year 1 before net synergies and continuing recovery of financial margin result in forecast operating income of $83 million in Year 2 and exceeding $130 million in Year 3 and later years. Key performance indicators show steady improvement over the projection period.

The financial projections demonstrate that the merged credit union provides a solid foundation for future profitability and growth, and position it for greater opportunity and success than either credit union could achieve independently on a status quo basis.

Balance Sheet ($ 000s)

Year 1

Year 2

Year 3

Year 4

Year 5

CAGR*

Total Net Loans

11,886,202

12,104,315

12,408,521

12,727,032

13,060,108

2.13%

Other Assets

1,876,510

1,971,804

2,043,122

2,135,525

2,235,060

 

TOTAL ASSETS

13,762,712

14,076,119

14,451,643

14,862,557

15,295,168

 

Total Deposits

12,472,751

12,766,974

13,056,843

13,357,916

13,675,507

2.21%

Other Liabilities

573,650

528,113

510,480

512,256

514,467

 

Total Equity

716,311

781,032

884,320

992,385

1,105,194

8.91%

TOTAL LIABILITIES & EQUITY

13,762,712

14,076,119

14,451,643

14,862,557

15,295,168

2.34%

Total Assets Under Administration**

17,580,982

18,134,518

18,765,917

19,449,488

20,172,647

3.22%

* Five-year compound annual growth rate

** Comprising total assets, syndicated & Canada Emergency Business Account (CEBA) loans and investment portfolios and mutual funds (at market value)

Income Statement ($ 000s)

Year 1

Year 2

Year 3

Year 4

Year 5

Financial Margin

190,300

285,226

333,773

343,952

354,795

Impairment Charges on Loans

679

647

983

1,178

1,309

Non-Interest Income

63,080

65,852

68,036

71,280

74,495

Total Non-Interest Expenses

263,705

267,506

268,853

276,340

284,629

Operating Income (Loss)

(11,004)

82,925

131,973

137,714

143,352

Dividends and Donations 

3,996

4,586

5,361

5,466

5,501

Income Taxes (Recoveries)

(2,550)

13,318

21,524

22,482

23,435

Net Income (Loss)

(12,450)

65,021

105,088

109,766

114,416

           
Key Performance Indicators

Year 1

Year 2

Year 3

Year 4

Year 5

Total Liquidity

12.21%

12.66%

12.89%

13.24%

13.60%

Capital Adequacy

12.71%

13.25%

14.42%

15.58%

16.74%

Financial Margin

1.39%

2.05%

2.34%

2.35%

2.36%

Operating Income/Assets (ROA)

(0.08%)

0.60%

0.93%

0.94%

0.95%

Operating Efficiency Ratio

104.08%

76.20%

66.91%

66.55%

66.30%

Return on Retained Earnings

(1.76%)

9.33%

13.79%

12.66%

11.71%

Asset Growth

1.00%

2.28%

2.67%

2.84%

2.91%

Impact of accounting standards on financial merger model

In the Proposed Merger, the impact of the International Financial Reporting Standards (IFRS) 3 Business Combinations will be analyzed. IFRS 3 outlines the accounting on the recognition and measurement of acquired assets and liabilities, and the necessary disclosures when an acquirer obtains control of a business. Business combinations require assets acquired and liabilities assumed to be measured and recorded at their fair values at the acquisition date to determine the purchase price allocation (PPA).

Based on preliminary assessments, the expected fair values of the loan and deposit portfolios compared to book value may differ materially, but is undeterminable at this time and has not been reflected in the financial projections above. Any fair value adjustments required for the loan and deposit portfolio will initially impact capital and will amortize over time through the profit and loss statement as those portfolios approach maturity. The anticipated increase in fair value compared to book value of real estate asset holdings is also expected to be material and increase capital. The PPA is determined following closing based on the assessment of the fair value of assets acquired and liabilities assumed.