LUDINGTON, Mich.–Credit unions distributing half their net worth, high net worth CUs offering no return to members, CUs sharing spaces and managers, merger-related payouts for some executives and more can all be found in this round-up of credit unions that have merged or are proposing mergers.
This is the first in a series that examines 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 readers time to see what the respective CUs say is driving their merger, what members are being told, who’s getting what, and more.
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.
Mason County School ECU Distributes Half its Net Worth
Merging Credit Union: Mason County School Employees CU, Ludington, Mich.
Assets: $6.685 million
Members: 556
Year Chartered: 1962
Date of Member Vote: Sept. 14, 2024
Acquiring Credit Union: Safe Harbor CU, Ludington, Mich.
Assets: $157.4 million
Members: 8,219
“Mason County School Employees Credit Union is finding it hard to compete in today’s highly regulated, high-tech environment,” the credit union told members. “The costs of technology and regulations have made it difficult for the credit union to provide its members with all of the products and services that larger credit unions can provide.”
MCSECU said it would distribute a portion of its net worth to members if the combination was approved, and distributed 55.37% of its capital as a bonus dividend paid at year-end.
It also closed its one office effective with the merger.
Mason County School Employees CU paid a merger-related bonus dividend to two members of its board: Walter Leinberger, who was to receive $15,444.80, and Kathy Winczewski, who was to receive $15,874.08.
MCSECU posted $24,134 in net income through the first half of 2024, with capital of 21.23%. Safe Harbor CU reported $858,619 in net income for the first half of 2024, with net worth of 9.05%.
After Years of Sharing Space, a Merger
Merging Credit Union: Tazewell County School Employees CU, Pekin, Ill.
Assets: $25.3-million
Members: 1,050
Year Chartered: 1950
Date of Member Vote: Sept. 17
Acquiring Credit Union: Cooperative Choice Network CU, Peoria, Ill.
Assets: $166.87 million
Members: 11,600
As Tazewell County School Employees CU President Kevin Freeman explained to members, TCSECU has already been in a close relationship with Members Choice CU for 13-plus years, sharing office space, an ATM and even a mutual employee. Freeman noted that in 2017 Members choice merged with Illinois Electric Credit Union to create the Cooperative Choice Network that has since merged in three other CUs, all of which operate as a separate division. Even after the merger, TCSECU would retain its name and brand, Freeman said, as well as its office and staff.
In addition, in its statement to members TCSECU pointed to eight different product and service additions that would be made as a result of the merger.
At mid-year 2024, Tazewell County School ECU had reported a loss of $14,021, with capital of 12.81%. CCNCU posted $77,750 in net income and had net worth of 13.12% as of the same date.
With Manager Already Being Shared, A Merger in NY
Merging Credit Union: UMICO FCU, New Hartford, N.Y.
Assets: $7.85 million
Members: 859
Year Chartered: 1939
Date of Member Vote: Sept. 18
Acquiring Credit Union: Special Metals FCU, New Hartford, N.Y.
Assets: $14.66 million
Members: 1,098
UMICO FCU members will be “provided with a wider array of financial products and services, including greatly improved succession plan (sic) and an improved member service location,” the credit union told members. “With Special Metals FCU’s past manager/CEO resigning, the Special Metals and UMICO FCU Board of Director’s (sic) feels leveraging their now shared manager/CEO manager/CEO (sic) with a record of accomplishments and leadership in a well-run credit union is the proper succession plan.”
It added that some fees may be higher and some may be reduced if the merger is approved.
UMICO FCU had $16,169 in net income at mid-year 2024, with net worth of 11.01%. Special Metals FCU had $45,937 in net income and net worth of 12.35% as of the same date.
A Small CU Nearly as Profitable as its Much-Larger Acquirer
Merging Credit Union: Purity Dairies Employees FCU, Nashville, Tenn.
Assets: $2.953 million
Members: 458
Year Chartered: 1960
Date of Member Vote: Sept. 18
Acquiring Credit Union: Outreach CU, Hermitage, Tenn.
Assets: $28.92 million
Members: 1,886
Purity Dairies EFCU was about as succinct as it could be, saying a merger would allow it to offer free checking accounts, debit cards, additional savings account types and loan types, money markets, and IRAs. It also cited delivery through “multiple delivery platforms.”
As of mid-year 2024, PDEFCU reported $15,528 in net income, with capital of 23.9% (it did not indicate any plan to return surplus capital to members). Although 10 times larger, Outreach CU was only slightly more profitable as of June 30, reporting $21,834 in net income to go with capital of 11.4%.
Near Identical Names, But Similarity Ends There; Payout for Members, Managers
Merging Credit Union: Kingston TVA Employees CU, Harriman, Tenn.
Assets: $2.29 million
Members: 325
Year Chartered: 199
Date of Member Vote: Sept. 19
Acquiring Credit Union: Knoxville TVA Employees CU, Knoxville, Tenn.
Assets: $4.539 billion
Members: 281,925
In a merger of two CUs with nearly identical names and a similar field of membership, Kingston TVA Employees CU’s board said the merger had become necessary due to the closure of the TVA Fossil Plant, and merging would bring greater financial strength, a broader branch network, continued community focus, expanded products and services and a “clear vision.”
The statement to members notes Kingston TVA Employees had a 25.62% net worth ratio at year-end 2023, compared to 9.30% for Knoxville TVA Employees, and as a result $50 would be provided to each member of the former due to the merger.
Two people were to receive merger-related compensation:
- Manager Marsha Adkisson, who was to receive $68,441.27
- Assistant Manager Beverley Kelley, who was to receive $21,348.38.
Kingston TVA EFCU had $5,833 in net income in the first half of 2024, with net worth of 26.24%. Knoxville TVA EFCU had $30.051 million in net income and net worth of 10.01% as of the same date.
A Negative Bottom Line Makes the CASE for Merger
Merging Credit Union: CASE FCU, Tyler, Texas
Assets: $5.76 million
Members: 705
Year Chartered: 1956
Date of Member Vote: Sept. 19
Acquiring Credit Union: Telco Plus CU, Longview, Texas
Assets: $134.5 million
Members: 9,424
Case FCU, which primarily serves health care workers, told members that the merger would provide for the “financial stability and human resources that will give the membership of the continuing credit union the best possible service.”
CASE Federal posted a $46,718 as of Sept. 30, with net worth of 11.25%. As of mid-year 2024, Telco Plus CU had posted a loss of $82,944, with net worth of 10.98%.
More ‘Competitive Platform,’ Negative Bottom Line Drive Combo
Merging Credit Union: Jay Bee Employees FCU, Bethlehem, Penn.
Assets: $1.3 million
Members: 193
Year Chartered: 1962
Date of Member Vote: Sept. 19
Acquiring Credit Union: First Commonwealth FCU, Allentown, Penn.
Assets: $1.4 billion
Members: 94,198
“Assessing the needs of our members over the years, Jay Bee Employees Federal Credit Union sought opportunities to offer better physical infrastructure, additional products and services which include checking accounts, and a more modern and competitive banking service platform,” the JBEFCU board told members. “First Commonwealth FCU shares Jay Bee’s vision for delivery of innovative products and services with consideration for the financial well-being of our members and our community.”
It also cited additional branches, digital services and efficiencies as reasons for merging. JBEFCU said it would close its long branch upon completion of the combination.
Jay Bee Employees posted a mid-year 2024 loss of $8,814 to go with capital of 13.30%. First Commonwealth FCU reported $1.857 million in net income and capital of 10.79% as of the same date.
For WYO Central, Losses, Sub-7% Capital Leads to Tie-Up
Merging Credit Union: WYO Central FCU, Casper, Wyo.
Assets: $29.45 million
Members: 3,288
Year Chartered: 1958
Date of Member Vote: Sept. 19
Acquiring Credit Union: StagePoint FCU
Assets: $78.42 million
Members: 5.918
In its statement to members, WYO Central, which was undercapitalized and losing money, cited five bullet points as reasons to merge, including financial security, expanded product and serve offerings, enhanced technology, increased branch and ATM network and “continued commitment to community.”
WYO Central reported a loss of $73,171 at mid-year 2024, with capital of 6.26%. StagePoint FCU posted $49,694 in net income and capital of 9.2% as of June 30, 2024.
SD218EFCU Among Those Merging into CU 1
Merging Credit Union: School District 218 Employees FCU, Oak Lawn, Ill.
Assets: $14.78 million
Members: 817
Year Chartered: 1964
Date of Member Vote: Sept. 20
Acquiring Credit Union: Credit Union 1, Lombard, Ill.
Assets: $1.661 billion
Members: 123,549
School District 218 EFCU used language nearly identical that used by many of the other credit unions that have merged into Credit Union 1, saying the acquiring CU “operates with the technology and systems that align with our members’ needs. Their internal core values align with our own and give us confidence our membership will experience a much needed upgrade in the quality of service we are unable to provide in this economic environment. We believe a synergy exists between the two credit unions and this partnership will benefit all involved.”
SD218EFCU said its lone office will remain open.
School District 218 posted $14,113 in net income through mid-year 2024, with capital of 9.39%. Credit Union 1 had $3.269 million in net income and capital of 10.15% as of the same date.
5 Reasons Cited for Combining; Comp Increases for 2 Execs
Merging Credit Union: Advantis CU, Oregon City, Ore.
Assets: $1.92 billion
Members: 87,902
Year Chartered: 1928
Date of Member Vote: Sept. 23
Acquiring Credit Union: Rivermark Community Credit Union, Beaverton, Ore.
Assets: $1.65 billion
Members: 92,149
In addition to citing the ability to “accelerate our purpose-driving mission to become the leader in fostering financial wellness for our members and the boarder community,” Advantis said the merger would also create the scale and financial resources necessary to empower “future generations.”
It also listed five bullet-points as benefits of the merger, including:
- Increased branch locations and extended hours
- Video banking
- Enhanced online banking
- More financial coaches
- Greater community impact
While there will be no distribution of net worth to members, Advantis said two people would receive merger-related financial compensation, including:
- President/CEO Jason Werts. ACU said Werts’ annual base salary, noncash benefits and potential incentive comp will be increased by up to $163,978.
- SVP/CFO Greg Spear. ACU said Spear’s comp would be increased by an amount up to $83,005.
In both cases, Advantis CU said the figures were arrived at following a “market study of similarly sized credit unions and reflects that larger-sized credit union.”
Advantis CU posted $1.076 million in net income through June 30, 2024, with capital of 11.38%. Rivermark Community CU had $2.089 million in net income and net worth of 8.16% as of the same date.