MILLVILLE, N.J.–The newest review by the CU Daily of proposed credit union mergers finds a CU merging into a less-profitable acquirer, another citing a lack of resources, more cut-and-paste explanations, payouts to executives, and another CEO retirement leading to the retirement of the credit union itself.
Below are five of the latest merger proposals filed with NCUA. The CU Daily will have coverage throughout this week of the others.
Merging into Less Profitable CU
Merging CU: Thunderbolt Area FCU, Millville, N.J.
Assets: $41.2-million
Members: 3,362
Date Founded: 1951
Date of Member Vote: April 29
Acquiring CU: Members 1st of NJ FCU, Vineland, N.J.
Assets: $87.2-million
Members: 9,570
In its disclosure form to members, Thunderbolt Area FCU didn’t disclose anything, other than the technical details around the fact a merger was being proposed and that members should use the enclosed ballot to cast their votes.
Thunderbolt Area FCU had net income of $161,290 as of March 31, with capital of 11.80%. Members 1st of NJ FCU had $110,005 in Q1 net income to go with net worth of 7.61%.
A Boilerplate Explanation
Merging CU: Corry Jamestown Credit Union, Corry, Penn.
Assets: $27.4 million
Members: 2,667
Date Founded: 1954
Date of Member Vote: May 3
Acquiring CU: Armco Credit Union, Butler, Penn.
Assets: $650.6 million
Members: 42,461
Using the same boilerplate language used in so many merger disclosure forms, Corry Jamestown CU told members the “merger is desirable and in the best interests of members for a number of reasons, such as better pricing and services, additional products, enhanced convenience and account access and lower operating costs…The merged credit union will also achieve economies of scale, which will permit it to better compete in the increasingly competitive financial services industry.”
It said both CUs share a “members first philosophy.”
Corry Jamestown CU had $48,416 in in net income through Q1, with net worth of 10.01%. Armco CU had $934,346 in net income and net worth of 13.11% as of the same date.
Two CUs That See Heaven in Combination
Merging CU: Catholic Vantage Financial CU, Livonia, Mich.
Assets: $122.3 million
Members: 6,778
Date Founded: 1953
Date of Member Vote: May 6
Acquiring CU: Christian Financial CU, Sterling Heights, Mich.
Assets: $923.9 million
Members: 55,447
In its message to members, Catholic Vantage Financial provided a bullet-pointed list of what it said the benefits would be, including:
- Local Control and Foundational Synergies
- Additional Products and Services, including business accounts, investment advisory services, a mortgage company and commercial loans
- Economies of Scale
- Increased Member Access, including more branches and ATMs
- Focus on Ease of Conversion
- Continued Volunteer & Employee Representation. Three of the current five Catholic Vantage FCU board members will join the board of Christian Financial.
Exec Payout
Catholic Vantage said it will be paying its long-time CEO, Peter Bagazinski, a one-time bonus of $50,000 upon completion of the merger and a $10,000 increase in salary. In addition, Bagazinski will receive deferred compensation of $50,000 per year for five years. When the merger is completed he will become chief business development and advocacy officer with Christian Financial, according to the CU’s disclosure form.
Catholic Vantage Financial had $18,151 in net income through March 31, with net worth of 9.11%. Christian Financial posted $1.17 million in net income with net worth of 10.27% as of the same date.
‘Lack of Resources’ Cited
Merging CU: Wood County Employees CU, Wisconsin Rapids, Wis.
Assets: $780,989
Members: 159
Date Founded: 1955
Date of Member Vote: May 20
Acquiring CU: Park City CU, Merrill, Wis.
Assets: $368.5 million
Members: 24,586
“Our organization does not have the resources to invest in digital/mobile services that our members are expecting to conduct their transactions conveniently,” Wood County Employees CU’s board told members. “As WCECU members travel throughout Wisconsin and the United States, these services have become imperative. In addition, our credit union is losing members because of our limited products/services, and we believe that the Continuing Credit Union will bring value to our members and communities.”
WCECU lost $5,434 as of Q1, with net worth of 22.71% (it said it has no plans to return any net worth to members). Park City CU posted $586,587 in net income and had net worth of 9.52% as of the same date.
CEO Retires & Takes a VITAL CU With Him
Merging CU: VITAL FCU, Spartanburg, S.C.
Assets: $57.5-million
Members: 6,005
Date Founded: 1995
Date of Member Vote: May 20
Acquiring CU: Founders FCU, Lancaster, S.C.
Assets: $4.8-billion
Members: 275,555
In its statement to members, VITAL FCU, which also provided a projected combined financial statement of the continuing credit union, said the reasons to vote in favor of merging include:
- Both credit unions have a similar original mission.
- The VITAL FCU CEO, Omero DeLorenzo, plans to retire on Dec. 31, 2026
- Additional branch locations are needed in Spartanburg to better serve members.
- Additional ATMs are needed to better serve members.
- A designated call center is needed to better serve the members.
- A more robust full-service e-commerce solution is needed to better serve members.
- The access to branches in neighboring counties where members live and work.
- The access to additional products and services which we are unable to offer.
VITAL FCU had net income of $158,020 as of March 31, and capital of 16.24% (it said there will be no capital distribution because Founders FCU has similar net worth). Founders FCU posted $15.3-million in net income and had net worth of 12.75% as of the close of the quarter.
