DETROIT—An inability to find effective management, 25% net worth but no member payout; payouts to management teams, bullet-point lists and more can be found in this grouping of credit unions that have merged or are seeking to merge.
This is the third 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 time to readers to see what is driving mergers, 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.
Inability to Hire ‘Effective Management’ is Cited
Merging Credit Union: Teamsters FCU, Detroit
Assets: $13.5 million
Members: 1,818
Year Chartered: 1968
Date of Member Vote: Oct. 23
Acquiring Credit Union: Michigan First CU, Lathrup Village, Mich.
Assets: $1.47 billion
Members: 166,064
Teamsters Credit Union said it was seeking to merge because it lacks the financial wherewithal to “hire effective management” and in order to serve members in the way they “deserve.”
Merging with Michigan First, Teamsters CU added, will allow it to offer an expanded FOM, as well as expanded product offerings. It added that MFCU would also be able to offer additional channels, products and services that it currently cannot.
Teamsters Credit Union lost $60,911 through mid-year 2024, with capital at 10.55%. As of the same date, Michigan First had $10.88 million in net income to go with capital of 14.50%.
Near 25% Net Worth, But No Member Distribution
Merging Credit Union: Bivins FCU, Masterson, Texas
Assets: $3.84 million
Members: 501
Year Chartered: 1940
Date of Member Vote: Oct. 24
Acquiring Credit Union: Texan Sky FCU, Dumas, Texas
Assets: $69.5 million
Members: 8,773
Bivins FCU, which was founded to serve the oil and gas industry, said the merger would offer members an “enhanced array of innovative financial products and services, while providing membership in a strong institution with solid financial capital.” It added that Texan Sky FCU shares its legacy of promoting thrift and helping people to accumulate savings.
It offered an 11-point list of products/services it said the merger would make available.
Bivins Federal reported $9,939 in net income during the first half of 2024, with net worth of 24.66% (it indicated no plan to return any capital to members). Texan Sky had $478,668 in net income and capital of 15.06% as of the same date.
‘Broader Product & Service Offerings’ Cited by APS FCU in Memo to Members
Merging Credit Union: APS FCU, Charleroi, Penn.
Assets: $9.58 million
Members: 1,064
Year Chartered: 1935
Date of Member Vote: Oct. 25
Acquiring Credit Union: Frick Financial FCU, Uniontown, Penn.
Assets: $139 million
Members: 9,389
APS FCU said in its brief statement to members they should vote for the merger because it will provide “broader product and service offerings,” will be paid higher dividends, and will have more branches to choose from.
The higher dividends, the CU said, is the reason it would not be distributing any net worth.
APS FCU had $13,692 in net income as of June 30, 2024, with net worth at 8.17%. Frick Financial Reported $460,826 in net income and net worth of 13.75% as of the same date.
Tri-Boro FCU Members Given 5 Reasons to Vote Yes
Merging Credit Union: Tri Boro FCU, Munhall, Penn.
Assets: $123.2 million
Members: 8,089
Year Chartered: 1935
Date of Member Vote: Oct. 28
Acquiring Credit Union: OMEGA FCU, Wexford, Penn.
Assets: $167 million
Members: 16,127
Members of Tri Boro FCU were given five reasons a merger would be of benefit:
- It will create stability
- It is intended to reduce day-to-day operational challenges by providing more staff and volunteers
- It will increase growth and ability to provide “advances in technology, plus add additional locations:
- It will increase the number of ATMs
- It will allow the “credit union to remain a member-owned credit union focused on the members and communities
Tri Boro FCU had $589,672 in net income, with net worth of 13.60% (it will not be distributing any net worth) as of June 30, 2024. OMEGA FCU posted $701,508 in net income, with net worth of 10.68% as of the same date.
Similar Reasons for Plan are Cited by 2nd CU Merging into OMEGA FCU
Merging Credit Union: Fisher Scientific Employees FCU, Pittsburgh
Assets:$2.4 million
Members: 616
Year Chartered: 1952
Date of Member Vote: Oct. 30
Acquiring Credit Union: OMEGA FCU, Wexford, Penn.
Assets: $167 million
Members: 16.127
One of two credit unions seeking to merge into OMEGA FCU, Fisher Scientific EFCU offered a five-point list of reasons it believes it needed to merge that were the same reasons provided by Tri Boro FCU, which is the other CU merging into OMEGA.
Those five reasons included:
- It will create stability
- It is intended to reduce day-to-day operational challenges by providing more staff and volunteers
- It will increase growth and ability to provide “advances in technology, plus add additional locations (it plans to close its branch at year-end)
- It will increase the number of ATMs
- It will allow the “credit union to remain a member-owned credit union focused on the members and communities
FSEFCU posted a mid-year 2024 loss of $8,166, with net worth of 9.30%. OMEGA FCU posted $701,508 in net income, with net worth of 10.68% as of the same date.
A Michigan CU Says It’s ‘Hard to Compete’; Payout for 4 Execs
Merging Credit Union: Astera Credit Union, Lansing, Mich.
Assets: $191.3 million
Members: 14,691
Year Chartered: 1968
Date of Member Vote: Oct. 29
Acquiring Credit Union: Adventure Credit Union, Grand Rapids, Mich.
Assets: $443.3 million
Members: 30,998
Astera CU told members it has been finding it hard to compete and maintain financial strength in “today’s highly regulated, highly competitive, high-tech environment,” saying the costs of technology and regulation made it “difficult.”
“The credit unions board of directors has contemplated seeking a merger partner for some time period adventure credit union is a larger size organization, financially strong, will offer a larger field of membership for members to refer others who do not otherwise qualify for membership at Astera Credit Inion, shares the same common philosophies as our credit union and has offered employment to all of our employees, a commitment to retain our branches and serve our members along with an offer of representation on its board of directors,” Astera CU said in its message to members.
Four members of Astera CU’s management team were offered a “severance benefit in the event their employment with Adventure Credit Union is terminated without cause.”
They include:
- CFO Debra Miles, $125,000
- SVP-Operations Chris Tyler, $125,000
- SVP-Lending Laura Blanding, $75,000
- VP-IT James Paisley, $75,000
As of mid-year 2024, Astera CU had lost $334,753, with net worth of 8.97%. As of the same date, Adventure CU reported
From the High Sierra to the Desert Valleys; $285 Distribution to Members
Merging Credit Union: High Sierra Credit Union, Bishop, Calif.
Assets: $9.96 million
Members: 516
Year Chartered: 1981
Date of Member Vote: Oct, 30
Acquiring Credit Union: Desert Valleys FCU, Ridgecrest, Calif.
Assets: $68.9 billion
Members: 5,223
High Sierra cited the high costs of providing services and the ability to provide more access as reasons members should support a merger with Desert Valleys, which it said has a similar field of membership.
HSCU said it would pay a bonus share dividend of $285,000 to members, since its net worth ratio was higher than that of Desert Valleys.
High Sierra had $11,882 in net income as of June 30, 2024, with net worth of 16.25%. Desert Valleys FCU reported. High Sierra CU had $482,070 in net income and net worth of 8.61% as of the same date.
High Capital, But No Distribution; And No Reasons for Merger Cited
Merging Credit Union: South Louisiana FCU, Bridge City, La.
Assets: $5.96 million
Members: 566
Year Chartered: 1961
Date of Member Vote: Oct. 30
Acquiring Credit Union: OnPath FCU, Metairie, La.
Assets: $1 billion
Members: 84,600
In its disclosures filed with NCUA, South Louisiana FCU did not provide any reasons or explanations to members as to why it was seeking to merge.
SLFCU had $51,105 in net income through mid-year 2024, with capital at a whopping 31.3%. It did not indicate any plans for a net worth distribution. OnPath FCU had $4.03 million in net income and capital of 10.26% as of the same date.
‘Our Membership is Shrinking,’ Says United Investors FCU
Merging Credit Union: United Investors FCU, Linden, N.J.
Assets: $2.95 million
Members: 364
Year Chartered: 1960
Date of Member Vote: Nov. 1
Acquiring Credit Union: Mid-State FCU, Carteret, N.J.
Assets: $20.7 million
Members: 851
“Our current membership is shrinking and by merging it will allow the credit union to continue, and our membership will receive increased benefits and online services through the surviving credit union,” United Investors FCU told members.
United Investors had $14,509 in net income during the first half of 2024, with capital at 11.53%. Mid-State FCU posted $103,422 in net income, with net worth of 14.25% at mid-year.
8 Reasons to Vote for Tie-Up are Shared
Merging Credit Union: Proctor FCU, Proctor, Minn.
Assets: $70.4 million
Members: 6,792
Year Chartered: 1970
Date of Member Vote: Nov. 6
Acquiring Credit Union: Centricity Credit Union, Hermantown, Minn.
Assets: $246.8 million
Members: 17,552
Proctor FCU’s board gave its members eight reasons to vote in favor of the merger, including;
- Shared values
- Enhanced services, including improved digital offerings, competitive loan rates and personalized member support
- Operational efficiency
- Security and technology
- Enhanced oversight, meaning board and committee representation from both CUs
- Expanded FOM
- Enhanced benefits for employees
- Employee growth and advancement opportunities
PFCU had $571,262 in net income during the first half of 2024, with net worth of 10.49%. Centricity posted $1.74 million in net income and capital of 12.05% as of June 30.
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