FORT WORTH, Texas–“It’s only a matter of time before NCUA forces us to merge,” one CU told members as it sought their permission to combine with another. Other messages to members found in this latest CU Daily review of merger disclosures finds a CU saying nothing short of “harsh measures can save it,” more executive payouts, one CU decrying a lack of volunteers, and another with 46% net worth that is not returning any of it to members, and more.
This is the seventh in a series in The CU Daily that reviews nearly 100 of the most recent merger proposals that have been put in front of credit union members. The series has been divided into articles covering approximately 10 mergers/proposals each, to give time to readers to see what is driving mergers, what members are being told, who’s getting what, and more.
- Part I in this series can be found here.
- Part II in this series can be found here.
- Part III in this series can be found here.
- Part IV in this series can be found here
- Part V can be found here.
- Part VI can be found here.
About This Series
All of the reporting has been drawn from the merger-related disclosures required of all federally insured CUs.
Editor’s Note: The financial data cited for each of the credit unions below is drawn from the time period during which the proposed mergers were announced and disclosure forms were provided to members. For that reason, some of the financial data cite performance through the Q2 and Q3 5300 forms, while others cite data through year-end.
Here’s a look at what the CU Daily has found.
‘We are Facing an Earnings Crisis that Nothing Short of Harsh Measures Will Change”
Merging Credit Union: Family 1st of Texas FCU, Fort Worth, Texas
Assets: $19.2 million
Members: 1,341
Year Chartered: 1935
Date of Member Vote: Jan. 6
Acquiring Credit Union: Texas Trust CU, Arlington, Texas
Assets: $2 billion
Members: 136,176
After posting more than $600,000 in losses through the first three quarters of 2024, and with net worth well below 7%, Family 1st FCU told members, “Over the last few years the combination of the coronavirus pandemic, the great resignation (and) the rapid increase in interest rates have been difficult to overcome. These have combined to challenge our ability to produce sufficient income to support operations. When you add these challenges on top of the CECL standard for loan losses and a few 1-4 family rental delinqu34ncies, the prosect for continued positive earnings and growing operations looks dim. The financial services industry is also undergoing continuing commoditization that makes it difficult for smaller institutions to fine economies of scale and critical mass necessary to support operations. Our size also makes it difficult to take risks that could lead to added earnings but might also lead to higher losses.”
Adding that its board is committed to providing the most current products and services, the message to members added, “The cost to maintain this goal is steadily rising and combined with the other challenged mentioned, we are facing an earnings crisis that nothing short of harsh measures will change.”
Family 1st of Texas cited 20 product/service reasons to vote in favor of the merger.
Merger-Related Comp for Management
With its net worth below 7%, Family 1st said there would be no capital distribution to members, but it did list five members of management who will receive merger-related compensation, including:
- President/CEO Sandra Szymanski, who will receive a severance bonus of $130,627, a retention bonus of $21,771.17, and accrual for unrecorded vacation of 680 hours of $42,704.98.
- VP Cecelia Rodriguez, who will receive a severance bonus of $72,450, a retention bonus of $12,975, and accrual for unrecorded vacation of 400 hours of $13,932.69
- Accountant Erica Acosta, who will receive a retention bonus of $8,146.67
- Head Teller Carlos Hernandez, who will receive a severance bonus of $5,192.31 and a retention bonus of $7,500
- Accounting Clerk Matt Szymanski, who will receive a severance bonus of $4,620 and a retention bonus of $5,720.
Job Protections
Any employee who accepts continued employment with Texas Trust, instead of the severance option, will be protected from termination, except for cause, for 18 months (for the CEO and VP) and for 12 months for all others, according to the information provided to members.
Family 1st posted a $634,062 loss through Sept. 30, with net worth of 5.15%. Texas Trust had $2.7 million in net income and had net worth of 10.05% as of the same date.
A Nestle CU Sees Sweeter Future Elsewhere; Payouts for Members, 2 Execs
Merging Credit Union: Nestle (Freehold) Employees FCU, Jackson, N.J.
Assets: $1.34 million
Members: 134
Year Chartered: 1976
Date of Member Vote: Jan. 15
Acquiring Credit Union: First Financial FCU, Freehold, N.J.
Assets: $180.7 million
Members:15,985
Nestle FEFCU said the merger was in members’ best interests because it would provide checking/savings accounts, debit cards, personal loans, auto loans, mortgage loans, CDs/IRAs, a mobile app, Google/Samsung/Apple Pay, and Zelle.
With a capital ratio of 35.44% at the time it disclosed its merger plans to members, the credit union said it would distribute $16,000 of its net worth to members if the combination is approved, using a weighted distribution based on member share balances as of June 30.
NFEFCU said it will also keep its single office open.
Management Comp
Two people are to be paid merger-related compensation, including Treasurer/Manager LuAnn Aglietti, who will receive severance of $138,300; and Assistant Manager/Treasurer Kathleen Schnastny, who is to receive severance of $10,075.
Nestle Freehold Employees FCU posted $4,413 in net income and a whopping 48.35% net worth ratio as of Sept. 30, 2024. First Financial FCU posted $1.74 million in net income and net worth of 6.71% as of the same date.
3 Reasons to Merge are Cited, But Biggest is Ongoing Losses
Merging Credit Union: M&C Menlo Park FCU, Iselin, N.J.
Assets: $1.32 million
Members: 165
Year Chartered: 1967
Date of Member Vote: Jan. 23
Acquiring Credit Union: Affinity FCU, Basking Ridge, N.J.
Assets: $4.12 billion
Members: 231,022
M&C Menlo Park FCU, which has been posting losses, offered three reasons for seeking to merge:
- “Our corporate sponsor is closing the site where we operate. We cannot afford to open a new location.”
- “Both our membership and financial results have been declining for the past few years and there is little opportunity for growth in order to restore long-term viability.”
- “Affinity FCU offers a wider range of products and services at competitive prices, can provide service through local branches and digitally on their cell phone app, online and via their call center.”
M&C Menlo Park FCU reported a loss of $45,034 through the first three quarters of 2024, with capital at 6.56%. Affinity FCU has $4.2 million in net income and net worth of 8.33% as of the same date.
‘Less Than Necessary Volunteer Participation’ Among Reasons Cited
Merging Credit Union: Watsonville Hospital FCU, Watsonville, Calif.
Assets: $9.78 million
Members: 916
Year Chartered: 1962
Date of Member Vote: Jan. 28, 2025
Acquiring Credit Union: Corrections FCU, Soledad, Calif.
Assets: $25.5 million
Members: 2,690
Watsonville Hospital FCU told its members it needed to merge because:
- It has been “operating at a net loss with less than necessary volunteer participation for many years.”
- It has been “attempting to operate in a competitive financial market and is under continued pressure from increased operational and compliance costs.”
- It has a “limited ability to grow, expand products and services, and compete with other financial institutions in the market.”
Watsonville Hospital FCU posted a loss of $101,686 through Sept. 30, 2024, with net worth of 7.11%. Corrections FCU had $85,111 in net income and 9.45% capital as of the same date.
Eat or Be Eaton EFCU: ‘Cannot Sustain Continued Losses’
Merging Credit Union: Eaton Employees FCU, Denver
Assets: $259,386
Members: 69
Year Chartered: 1936
Date of Member Vote: Jan. 31
Acquiring Credit Union: Electrical FCU, Arvada, Colo.
Assets: $50.8 million
Members: 4,045
In a fill-in-the-blanks disclosure form to members, tiny Eaton Employees FCU stated simply, “The credit union has not been profitable for many years and cannot sustain continued losses.”
Eaton Employees CU, which was prior to the merger one of what were once 15 CUs in the U.S. with Eaton in their names—post merger, there will be two—reported a loss of $890 as of Sept. 30, with capital at 13.07%. As of the same date, Electrical FCU posted $312,749 in net income and capital of 11.98%.
Long List of Benefits, Long Explanation of Net Worth is Provided to Members
Merging Credit Union: Luzerne County FCU, Wilkes Barre, Penn.
Assets: $20.8 million
Members: 1,952
Year Chartered: 1966
Date of Member Vote: Feb. 2, 2025
Acquiring Credit Union: CityMark FCU, Plains, Penn.
Assets: $114.6 million
Members: 6,081
In its message to members, Luzerne County FCU listed the benefits the merger would have for both its own members as well as the acquiring CityMark FCU. Those benefits included:
- Increased convenience and improved service as the result of more locations
- Commercial deposit accounts, loan products, cash management, remote deposit capture, and more extensive business services.
- Increased “return to member” in the form of better rates.
- Expand ed deposit products.
- More advanced e-services and online offerings.
- Increased expertise and use of market analytics and digital advertising.
- Expanded focus on the educational community
- Lower operating costs
Luzerne County’s disclosure to members included one of the longer explanations when compared to other CUs of its net worth and why there would be no share adjustment. It said LCFCU’s courthouse office will be closing, but another branch is less than two miles away.
Compensation for Execs
LCFCU said two executives will receive merger-related compensation if the merger is approved:
- Treasurer and 40-year CEO Dan Stempleski will receive $100,000
- Assistant Manager Eileen Stempien will receive $60,000
Luzerne County FCU posted $9,035 in net income through the first three quarters of 2024, with capital at 7.64%. CityMark FCU posted $1.95 million and had net worth of 16.48%.
Two Execs to See Merger-Related Payouts
Merging Credit Union: Delaware Alliance FCU, New Castle, Del.
Assets: $25 million
Members: 2,664
Year Chartered:1963
Date of Member Vote: Feb. 26, 2025
Acquiring Credit Union: Community Powered FCU, Bear, Del.
Assets: $120.9 million
Members: 8,640
The disclosure form filed with NCUA is for Delaware Alliance FCU, but the credit union is actually All4You Federal Credit Union. It cites merger benefits that include a wider range of products and services and greater efficiencies of scale as reasons for combining.
DAFCU said two people will receive merger-related compensation, including CEO/Manager Dawn Sutcliffe, who is to be paid a retirement payout of $397,671, and Accountant Richard Strosser, who is to be paid a retention bonus of $20,000.
Delaware Alliance FCU posted $85,913 in net income through Sept. 30, 2024, with net worth of 14.28% (no payout to members is planned). Community Powered FCU reported $1.423 in net income and net worth of 15.73% as of the same date.
46% Net Worth But No Member Distribution
Merging Credit Union: Postal Employees Regional FCU, Pawtucket, R.I.
Assets: $5.84 million
Members: 617
Year Chartered: 1993
Date of Member Vote: March 13
Acquiring Credit Union: Navigant Credit Union, Smithfield, R.I.
Assets: $3.881 billion
Members: 155,333
Postal Employees Regional FCU cited six reasons for seeking to merge:
- Difficulties in attracting new officers and board members
- Declining growth
- Increased regulatory burden
- Need for greater convenience and access for members
- Desire to offer additional products and services
- Operational efficiencies
PERFCU said CEO Charlene LaPlante will retire with the effective date of the merger and will receive a bonus of $25,000 as part of merger-related compensation.
Despite a whopping 46.92% net worth ratio, Postal Employees Regional told members there would be no distribution because of the costs Navigant Credit Union will incur related to the merger, and added, “Because the board believes the benefits our members will receive by becoming Navigant Credit Union members far exceeds a one-time dividend.”
PERFCU said it will close its one branch effective with the merger.
Postal Employees Regional posted $60,858 in net income through the first three quarters of 2024. Navigant CU had $11.9 million in net income and net worth of 9.75% as of the same date.
‘Only a Matter of Time Before NCUA Forces Us to Merge or Close’
Merging Credit Union: Valley-Wide of PA FCU, Tarentum, Penn.
Assets: $939,370
Members: 214
Year Chartered: 1955
Date of Member Vote: Feb. 28, 2025
Acquiring Credit Union: Pheple FCU, Greensburg, Penn.
Assets: $120.5 million
Members: 17,444
In what may be the nicest merger-related disclosure provided to members of a credit union, Valley-Wide of PA FCU created a 21-page booklet outlining all aspects of the proposal.
“With our aging board and my approaching retirement, it is the right time to merge our credit union,” wrote Matthew G. Huet, CEO/director of VWPAFCU. “As a small credit union it has been difficult at best to be competitive and to offer the services we know our membership requires to grow. Over the last many years our credit union has shrunk in size and assets. This size will continue. Without a drastic change, it will be only a matter of time before NCUA (our regulator) forces us to merge or close our doors.”
The booklet includes a statement from the chairman of Pheple FCU explaining what it is all about, and cites additional products, services, and locations as reasons for voting in favor of the merger. It includes a full listing of those benefits.
Valley-Wide of PA says it does plan to distribute some of its net worth if the merger is approved in the form of a $25 per member payment. The booklet also includes a full financial statement for both credit unions.
VWPAFCU reported a loss of $15,063 through Sept. 30, 2024, with net worth of 14.60%. Pheple FCU posted $311,356 in net income and had capital of 9.12% as of the same date.
We Are ‘Unable to Continue,’ Says BBAMECFCU
Merging Credit Union: Big Bethel A.M.E. Church FCU, Atlanta
Assets: $313,052
Members: 191
Year Chartered: 1995
Date of Member Vote: Feb. 24, 2025
Acquiring Credit Union: Georgia United CU, Duluth, Ga.
Assets: $2.266 billion
Members: 150,670
“The management of Big Bethel continues to see a rise in the time requirements to appropriately manage the credit union while balancing with their personal time commitments,” BBAMECFCU told members. “The board is unable to continue with the time commitment and are unable to find replacements with the appropriate experience and ability to devote sufficient time to running the institution.”
The credit union also said regulatory and other operating costs continue to rise, and that a merger will address those issues and provide for more products and services for members, which it detailed with a 14-bullet-point list.
Big Bethel A.M.E. Church FCU had $6,266 in net income and net worth of 19.28% as of Sept. 30, while Georgia United reported $13.8 million in net income and net worth of 10.78% as of the same date.
