STOUGHTON, Wis.–A highly unusual distribution of 100% of a CU’s net worth, profitability questions and more payouts to management can all be found in this latest review by the CU Daily of merger proposals in credit unions.
This is the third part of a three-part series on the latest proposed mergers as well as what members are being told. Part I in the CU Daily’s industry-leading coverage of the issue can be found here. Part II is here.
A Tiny CU Pays Out a Bonus
Merging Credit Union: Stoughton US Rubber Employees CU, Stoughton, Wis.
Assets: $409,514
Members: 299
Year Founded: 1951
Member Vote: August 9
Acquiring Credit Union: Fort Community Credit Union, Fort Atkinson, Wis.
Assets: $393.9 million
Members: 21,639
The board of Stoughton US Rubber Employees CU the merger is desirable because “the merger will provide their members with access to additional products, services and digital banking capabilities.”
The credit union said it would not be distributing any net worth as part of the merger because it paid out a special dividend of $54,500 on Jan. 21. Plans call for closing its main office if the merger gets the OK, it said.
SUSRECU reported a $60,818 loss as of Q1 (nearly 15% of its assets), with net worth of 37.47%. Fort Community had $518,419 in net income and net worth of 12.37% as of the same date.
As Profitable CU Merges Into Unprofitable CU, CEO Comp Includes Travel Allowance
Merging Credit Union: Ukrainian Selfreliance FCU, Feasterville Trevose, Penn.
Assets: $533.5 million
Members: 16,759
Year Founded: 1952
Member Vote: August 12
Acquiring Credit Union: Self Reliance NY FCU, New York, N.Y.
Assets: $1.45 billion
Members: 14,809
Members of Ukrainian Selfreliance FCU were told the merger is in their best interests “for a number of reasons, such as better pricing and services, additional products, enhanced convenience and account access and lower operating costs as a larger combined institution. The merged credit union will also achieve economies of scale which will permit it to better compete in the increasingly competitive financial services industry.”
Anatoli Murha, CEO of Ukrainian Self-Reliance FCU, will receive merger-related compensation, including a pay increase by $95,000, a fixed annual travel allowance of $20,000, and a guaranteed incentive bonus of $65,000 to be paid on Dec. 31, 2025.
USRFCU reported $288,011 in net income as of March 31, with net worth of 9.53%. Self-Reliance NY FCU posted a $133,462 loss as of Q1, with net worth of 17.54%. It also posted a loss of $190,903 as of year-end 2024.
A Bullet-Point List of Benefits
Merging Credit Union: Piedmont Credit Union, Statesville, N.C.
Assets: $5.57 million
Members: 947
Year Founded: 1981
Member Vote: August 12
Acquiring Credit Union: Members Credit Union, Winston-Salem, N.C.
Assets: $454 million
Members: 48,425
Piedmont Credit Union gave its members a list of nine bullet points for reasons to vote for the merger, including free checking accounts, ability to use Members CU branches, online banking, no ATM surcharges at certain machines, investment advice and “expanded resources.”
PCU posted a loss of $1,712 as of Q1, with net worth of 7.82%. Members CU had $885,956 in net income and net worth of 14.24% as of the same date.
Operating in the Red, MCNJEFCU Seeks Partner
Merging Credit Union: Middlesex County NJ Employees FCU, Edison, N.J.
Assets: $7.6 million
Members: 1,327
Year Founded: 1968
Member Vote: Aug. 12
Acquiring Credit Union: New Brunswick Postal FCU, Edison, N.J.
Assets: $18 million
Members: 2,159
In a fill-in-the-blanks disclosure to members, Middlesex County NJ EFCU offered two reasons for members to vote in favor of merging:
- Middlesex County has not been profitable for the past several years
- Middlesex County members will benefit by having access to additional services
MCNJEFCU posted a loss of $29,060 as of Q1, with net worth of 10.56%. New Brunswick Postal was also in the red as of March 31, showing a loss of $19,005 to go with net worth of 10.67%. It posted positive net income of $109,283 as of Dec. 31, 2024.
Merger-Related Comp for Three Execs
Merging Credit Union: Portland Local 8 FCU, Portland, Ore.
Assets: $40.5 million
Members: 2,261
Year Founded: 1954
Member Vote: Aug. 20
Acquiring Credit Union: I.L.W.U. FCU, Long Beach, Calif.
Assets: $516.7 million
Members: 27,784
A merger, the board of Portland Local 8, told members, is desirable “because it allows for a consolidation of energies and resources of the two credit unions to better serve the members in a competitive and secure environment. ILWU FCU has been serving the unique financial needs of ILWU members and their families for over 70 years period they understand longshoremen and union workers and offer products and services tailored to their needs.”
It added that ILWUFCU also supports many ILWU events and charities.
Portland Local 8 said if the merger gets the thumbs up it will keep its existing branch open with the same staff, and members will have access to a total of seven branches across three states, as well as a larger call center, shared branches, more ATMs, digital wallet capabilities, and enhanced online banking.
Moreover, expanded loans and credit cards will also be available, PL8FCu told members.
Merger-Related Compensation
PDX8 FCU, as it refers to itself, said merger-related compensation will be paid, including to:
- CEO Jon Labonite, who will continue to be employed in an executive position on an “at will” basis at current rate of pay. He will also receive a one-time bonus of $215,000.
- Marketing and Community Engagement Manager Rebecca Boles will receive a retention bonus of $13,521.22 if employed by the combined CU for six months post-merger.
- Branch and Project Manager Josh Hansen will be offered a limited severance of $13.858.48 if his employment is terminated without case between the merger date and the initial six months post-merger.
Portland Local 8 posted a loss of $10,994 as of March 31, with net worth of 9.43%. It lost $84759 at year-end 2024. I.L.W.U FCU had $1.6 million in net income as of Q1, with net worth of 9.22%.
A CU Distributing 100% of Net Worth & an ‘Important Note’
Merging Credit Union: Cabot Employees Credit Union, Ville Platte, La.
Assets: $402,418
Members: 65
Year Founded: 1956
Member Vote: August 26
Acquiring Credit Union: Southwest Louisiana FCU, Lake Charles, La.
Assets: $180.7 million
Members: 18,901
“The board of directors has concluded that the proposed merger is desirable and in the best interest of the members because both Cabot’s CU and SWLACU are well operated, financially sound, and share a common service culture,” Cabot Employees told members. “Cabot members will enjoy the convenience and benefits of additional branches, shared branches, ATMs, and an impressive list of products and services, many of which are conveniently delivered electronically, all of which are unavailable by the current credit union.”
CECU said the one part-time employee will be retained.
Cabot Employees CU said it plans to distribute 100% of its net worth as of March 31, totaling $64,423.85 divided evenly among its 65 members, for approximately $991.13 per member.
It added a note that, “It is important to note that none of the employees or unpaid volunteer in either Cabot CU or SWLACU will receive any direct or indirect financial benefit in connection with this merger.”
Cabot Employees CU had $211 in Q1 net income, and net worth of 16.06%. SWLACU had $70,766 in net income and net worth of 15.10%.
Combo Would Create A $3B Florida CU With Big Footprint
Merging Credit Union: Envision Credit Union, Tallahassee, Fla.
Assets: $862.1 million
Members: 63,376
Year Founded: 1954
Member Vote: Sept. 12
Acquiring Credit Union: Additional Financial CU, Lake Mary, Fla.
Assets: $2.83 billion
Members: 190,162
As the CU Daily reported earlier, the two credit unions are seeking to create a more than $3 billion CU that would stretch from the central part of the state to the state’s panhandle region.
In its statement to members, Envision CU said the merger is in members best interests because it will create a CU with “additional economies of scale that will increase financial strength and stability; will mean additional products, services and technologies that will enhance the experience of all members, and will offer additional branch locations to all members, and will increase community services, specifically financial education and social services.”
The credit unions said in a statement that under the terms of the agreement they will operate as Addition Financial Credit Union under the leadership of current president and CEO Kevin Miller. If regulators approve and Envision Credit Union members vote in favor, the merger is expected to be finalized by the end of 2025.
Envision Credit Union reported $3.73 million in net income and net worth of 11.32% as Q1. Addition Financial had $10.9 million in net income and net worth of 10.48%.
Founded in 1937 and 1954 respectively, Addition Financial and Envision both noted they were formed by small groups of educators.
Inability to Find New CEO is Cited
Merging Credit Union: Cape Regional CU, Cape Girardeau, Mo.
Assets: $19.5 million
Members: 2,507
Year Founded: 1971
Member Vote: August 21
Acquiring Credit Union: Ozark FCU, Poplar Bluff, Mo.
Assets: $114.6 million
Members: 16,513
Cape Regional CU said simply, the reason for the emerger is the inability to find a qualified candidate to replace the retiring president/CEO. Plus, the added serves the merger will bring to Cape Regional CU members.
Those added services include expanded remote and mobile banking, Payday Alternative Loans, six more branches, online account opening, a full-service real estate department, instant issue debit cards and more, it said.
Cape Regional CU had $27,449 in net income in the first quarter, with net worth of 7.53%. Ozark FCU had $348,274 in net income and net worth of 11.01%.
