WATERBURY, Conn.–A CU that’s joining another that offers a “division” model, more merger-related compensation for execs, and the inability to meet rising member expectations are among the reasons being cited by credit unions seeking to merge, one of which plans a large member payout.
This is the second in a two-part series in The CU Daily’s ongoing coverage of mergers taking place in credit unions. The report is based on the information NCUA requires credit unions provide their members ahead of a merger vote. Part one can be found here.
‘Increasingly Difficult for Small Credit Unions’
Merging Credit Union: Waterbury Postal Employees FCU, Waterbury, Conn.
Assets: $10.7 million
Members: 889
Year Chartered: 1939
Date of Member Vote: June 14
Acquiring Credit Union: America’s First Network CU, East Hartford, Conn.
Assets: $105.7 million
Members: 9,480
“It has become increasingly difficult for small credit unions to meet the financial demands for state-of-the-art technology and regulatory compliance,” the board of Waterbury Postal Employees FCU told members, before citing reasons it said the merger was in their best interests. Those reasons include:
- America’s First Network CU’s divisional network structure will allow WPEFCU to maintain its brand, operating as a brand of the larger CU.
- There will be reduced operating expenses
- The WPEFCU branch will remain open
- There will be product improvements, including a mobile app and remote deposit capture, expanding lending (including Visa cards and HELCs), there will be surcharge-free ATMs and there will be an expanded branch network.
Waterbury Postal said it will pay a one-time special membership dividend of $200,000 if the merger is approved based on share balances as of year-end 2025.
Merger-Related Compensation
The credit union said two people will receive merger-related compensation:
- Manager/CEO John Brown, who is to receive $100,000 based on years of service
- Senior MSR Maria Stevens, who is to receive $60,000 based on years of service
‘Significant Operational’ Issues, Loss of Sponsor Cited; Payout to Members
Merging Credit Union: BCBST Employees Credit Union, Chattanooga, Tenn.
Assets: $10 million
Members: 1,558
Year Chartered:1991
Date of Member Vote: June 16
Acquiring Credit Union: Chattanooga Federal Employees CU, Chattanooga, Tenn.
Assets: $74.9 million
Members: 2,843
BCBST Employees Credit Union told members the proposed merger is motivated by several factors, “including significant operational and environmental shifts impacting the BCBST Employee Credit Union(‘s) long-term sustainability and efficiency.
“First, the transition to a predominantly remote first work environment has materially reduced on site activity, resulting in lower utilization. This shift has prompted a broader strategic effort to streamline and consolidate our corporate campus footprint to better align resources with actual organizational needs,” the message to members continued. “In addition, decreased in person traffic has limited the effectiveness and necessity of maintaining an on-campus presence that was previously justified by higher levels of daily onsite engagement. Consolidation through merger allows for better allocation of staff, technology, and support resources to match the evolving hybrid work model. Finally, the loss of our primary sponsor has created both financial and operational pressures (that) require a more unified and cost-efficient structure.”
Member Payout
BCBST ECU said it will pay $20 to each member to bring their account up to the $25 minimum deposit requirement of Chattanooga Federal Employees CU.
BCBSTECU had $14,690 in income during Q1, with net worth of 21.49%. Chattanooga Federal ECU posted $96,364 in net income and had net worth of 16.49% as of the same date.
CU in the Red, But Still a Payout to Execs
Merging Credit Union: Illinois Valley Credit Union, Peru, Ill.
Assets: $37.4-million
Members: 4,213
Year Chartered: 1955
Date of Member Vote: June 18
Acquiring Credit Union: Credit Union 1, Lombard, Ill.
Assets: $2.63 billion
Members: 167,836
If members approve, Illinois Valley CU would just be the latest credit union to be absorbed by Credit Union 1. In its message to members, it said the merger was a good idea because Credit Union 1 “operates with the technology and systems that align with our members’ needs. Their internal core values aligned with our own and give us confidence our membership will experience the same quality of service, but with new and expanded service options. We believe a synergy exists between the two credit unions and this partnership will benefit all involved.”
It then listed nine bullet pointed benefits from the merger, included improved technology, enhanced financial options, improved cyber-security, and national recognition through established partnerships.
Merger-Related Financial Compensation
Mergers into Credit Union 1 often include merger-related compensation, and that is the case with Illinois Valley CU. IVCU said that as part of the merger:
- President and CEO Thomas Kist will be paid a merger-retention incentive of $250,000. Kist will be offered continued employment for six years with an annual base salary increase of $66,000.
- VP Lori Siensa will be paid a merger-retention incentive of $50,000. Siensa will be offered continued employment for six years with an annual salary increase of $26,000.
Illinois Valley CU lost $336,635 in the first quarter, with net worth of 9.94%. Credit Union 1 posted $16.3 million in net income and had net worth of 10.88%.
A Struggle With Net Worth
Merging Credit Union: Solutions First FCU, Enterprise, Ala.
Assets: $45.6 million
Members: 4,941
Year Chartered: 1964
Date of Member Vote: June 18
Acquiring Credit Union: Guardian Credit Union, Prattville, Ala.
Assets: $1.21 billion
Members: 94,635
“A merger of these two institutions will bring about a broader array of products and services than is currently being offered to the members of solutions first period these include, but are not limited to, the following: many share and loan products, high yield checking and savings options, business products, expanded mortgage options, enhanced digital banking solutions that provide 24/7 account access, online deposit and loan applications, mobile payments and deposits (and) a dedicated member contact center that includes voice and chat capabilities,” Solutions First told members.
Solutions First had $9,111 in net income in the first quarter, with net worth of 6.68%. Guardian CU had $3.35 million in net income and net worth of 9.57%.
Acquired CU, Which Has Posted Losses, to be Surviving Brand
Merging Credit Union: CommonWealth One FCU, Alexandria City, Va.
Assets: $511.3 million
Members: 28.734
Year Chartered: 1944
Date of Member Vote: June 25
Acquiring Credit Union: Arlington Community FCU, Falls Church, Va.
Assets: $540.7 million
Members: 25,848
CommonWealth ONE FCU, which reported a loss of $897687 as of Q1, may be the CU being acquired, but its name and brand will be the survivor, a move the credit union said, “reflects a more inclusive representation of the combined membership and aligns with the shared vision for the future credit union.”
Overall, it said it needs to merge in order to “deliver our members even greater value than they receive today.” It said benefits of the merger will include more locations, enhanced experience, increased innovation, stronger communities, and the same familiar faces.
It said the combined CU will have a 13-member board, with seven members from CommonWealth One’s board and six from that of Arlington Community CU.
Plans call for ACFCU President/CEO Karen Rosales to lead the combined CU, with CommonWealth One CEO Frank Wasson planning to retire and then move to a “strategic advisory role during the post-merger integration period.”
Merger-Related Compensation
CommonWealth One said Wasson has a split-dollar agreement that will vest when he retires. He is to receive payout of unused accrued paid time off benefits of $52,762.71.
In addition:
- VP-Projects & Performance Larry Flory is to receive a total retention bonus of $39,000, and is to receive payout of unused accrued paid time off benefits of $22,855.68
- Chief HR Officer David Lane is to receive payout of accrued paid time off benefits of $40,797.
In addition to the loss reported above, CommonWealth One FCU had net worth of 8.03%. It had net income of $114,015 in 2025. Arlington Community had $260,395 in Q1 net income, with net worth at 7,48%.
A $10 Million Special Member Dividend
Merging Credit Union: Lincoln County CU, Libby, Mont.
Assets: $182.4 million
Members: 5,698
Year Chartered: 1957
Date of Member Vote: July 9
Acquiring Credit Union: Park Side Financial Credit Union, Whitefish, Mont.
Assets: $389 million
Members: 30,171
“Lincoln County credit union is in a strong position today. Our balance sheet is solid. Our capital is strong. We have served our members and communities well. This decision is not about reacting to weakness; this is about building on strength and ensuring that the credit union remains well positioned for the future. As we looked ahead, we asked a simple but important question: how do we ensure that this credit union continues to meet the needs of our members not just today, but 5, 10, and 20 years from now? The financial land services landscape is changing. Member expectations are increasing, especially around technology, access, and product offerings. At the same time, scale and resources matter more than ever in delivering those services effectively. The board believes this merger provides a proactive and thoughtful answer to those challenges.”
The board said the reasons it is recommending members vote in favor of merging include:
- It will pay a special member dividend of more than $10 million, with every member to receive at least $500
- The merger strengthens its commitment to Lincoln County, Mont.
- It creates a stronger credit union for the future, with a broader range of products and services.
Merger-Related Compensation
Three people are to receive merger-related compensation as part of the merger, including:
- CEO Lindsay Beaty, who is to receive a one-time payment of $152,857
- Manager Mailyn D’Aponti, who is to receive a one-time payment of $85,714
- Back Office Processor Wanda Danner, who is to receive a one-time payment of $28,571
Lincoln County CU had net income of $940,008 in Q1, with net worth of 21.54%. Parkside Financial CU reported $994,198 in net income and net worth of 9.32% as of March 31.
