NEWARK, N.J.–This latest review of credit union merger proposals finds several CUs paying out compensation to management—even at credit unions that are losing money—as well as one unique employee payout—but no members receiving any net worth distributions.

This is part of one of a multi-part series as part of the CU Daily’s industry-leading coverage of mergers in credit unions.

Operating in the Red, UCCU Looks to Combine

Merging Credit Union:  United Cities CU, Newark, N.J.

Assets: $25.7 million

Members: 2,854

Year Founded:  1935

Member Vote: June 12

Acquiring Credit Union: North Jersey CU, Totowa, N.J.

Assets: $234.1 million

Members: 24,477

United Cities told members the merger is desirable because they will receive “expanded products and services not presently provided. The members will have direct access to residential mortgages, online banking services, business loans, commercial real estate, home equity lines of credit, overdraft protection privileges, P2P transfer services” and more.

It also cited a wider field of membership as another benefit. 

Comp to be Paid

UCCU said President and CEO Richard Garcia will receive merger-related compensation of $25,565, which it told members is “0.001%” of assets.

United Cities reported a loss of $94,466 as of March 31, to go with net worth of 8.99%. North Jersey Credit Union had $13,230 in net income and net worth of 10.54% as of the same date.

After 47 Years, Manager Retires Has Retired From Tiny CU

Merging Credit Union: Curtis FCU, Sandy Hook, Conn.

Assets: $238,760

Members: 55

Year Founded:  1969

Member Vote: June 12

Acquiring Credit Union: Skyline Financial FCU, Waterbury, Conn.

Assets: $38.5 million

Members: 3,691

In a first-person letter to members, CEO Pamela J. Michel noted she had retired from the sponsor company, Curtis Packaging, after 47 years. Michel said that is the reason the board is proposing the merger with Skyline Financial FCU, which, even though it has just one office, “will be able to offer you much more than we could by offering debit cards, online banking, access to no-fee ATMs” and more. 
“I have already been offered to become an officer at Skyline so I can still be involved,” added Michel. 

Curtis FCU posted $1,662 in net income for Q1, with capital at 25.59% (it did not indicate any plan to distribute any of the net worth). Skyline Financial had $20,842 in net income and net worth of 7.78% as of the same date. 

With Capital Below 7%, Comp Still Being Paid to 2 Execs

Merging Credit Union:  Southwest FCU, Albuquerque, N.M.

Assets: $78 million

Members: 4,296

Year Founded:  1936

Member Vote: 

Acquiring Credit Union: First Financial CU, Albuquerque, N.M.

Assets: $964.7 million

Members: 93,551

Although it didn’t note its negative net income, Southwest FCU provided members with a 15-bullet-point list of reasons the merger should be approved, including more products and services, more branches, aligned organizational cultures, increase operational efficiency, more competitive pricing, “effective leveraging of the credit union’s capital and underserved membership,” diversification and more. 

Merger-Related Comp

Two people are to receive merger-related compensation:

• President/CO Randy Lundsford, who is to receive severance pay of $60,096
• SVP/Controller Ted Williams, who is to receive severance pay of $25,168

Southwest FCU posted a Q1 loss of $184,352, with net worth at 6.21%. First Financial had $852,159 in net income and net worth of 8.88% as of March 31. 

Losing Money, One CU Sees ‘Opportunities’ in Combo

Merging Credit Union:  Opportunities Credit Union, Winooski, Vt.

Assets: $62.4 million

Members: 5,374

Year Founded:  1989

Member Vote: June 25

Acquiring Credit Union: Green Mountain CU, South Burlington, Vt.

Assets: $103.6 million

Members: 4,681

The board of Opportunities CU, which posted a loss at year-end 2024 and for the first quarter, told its members they should vote for the merger because it will “combine resources and expertise to enhance financial stability, expand product offerings and strengthen the capacity to mee the needs of underserved populations.”

It said the merger is “intended to”:

• Ensure continuity in leadership, with Green Mountain CU assuming operational oversight and its CEO remaining in place
• Enhance financial stability and increase lending capacity
• Expand community development initiatives with a focus on low-income and underserve populations
• Broaden product and service offerings while reducing operational costs through economies of scale
• Maintain and expand access to financial services across Vermont

Opportunities CU said it and GMCU both run the same core system and that the OSU branches in Winooski and Burlington will remain open.

In addition, it said three of its board members will join the GMCU board and that an advisory board would be created to “guide strategic initiatives.”

New Tagline

It further said it plans to investigate becoming a CDFI if the merger is approved, and that the tagline for the combined operation will be rebranded to, “Green Mountain Credit Union—Where Opportunities Begin.”

Unlike most merger disclosure forms, Opportunities CU listed not just the names of the members of the continuing board, but their addresses, as well. 

Opportunities CU posted a $159,749 loss as of Q1, with net worth of 10.74%. It reported a loss of $310,146 as of year-end 2024. Green Mountain CU had net income of $256,521 as of Q1, with net worth of 13.75%. 

A Simple, Straightforward Case

Merging Credit Union: Alabama River CU, Monroeville, Ala.

Assets: $23.3 million

Members: 1,731

Year Founded: 1980

Member Vote: June 26

Acquiring Credit Union: Alabama Credit Union, Tuscaloosa

Assets:  $1.975 billion

Members: 146,718

Alabama River CU told members a merger will provide a full array of financial products and services, as well as more branches and a nationwide network of shared branches and ATMs. 

Alabama River had $16,474 in net income as of March 31, with net worth of 9.65%. Alabama CU had $2.6 million in net income and net worth of 9.61% as of the same date. 

Manager Retirement Cited; Unique Payout for Employees

Merging Credit Union: Division 726 FCU, Staten Island, N.Y.

Assets: $9.77 million

Members: 2,476

Year Founded: 1970

Member Vote: July 2

Acquiring Credit Union: Educational and Governmental FCU, Hartsdale, N.Y. 

Assets: $55.6 million

Members: 6,366

“The credit union’s current management is near retirement, and does not believe it can afford to higher (sic) experienced and qualified professionals to continue safe and secure operations in the future,” the credit union told members. 

It also cited “progressive” product and service offerings, including an enhanced website, bill pay, and online loan applications, as well as surcharge-free ATMs, as advantges of the combination.

Division 726 FCU aid its current office will remain open, and that members will have access to two more branches after the merger. 

“After determining the market value of Division 726 FCU’s loans and shares, and the impact of the proposed severance package to the merging credit union’s employees, there is a significant reduction in the value of net worth of the merging credit union well below 500 basis points,” the credit union stated in explaining why it would not distribute any capital to members.

Unique Payout

In a unique payout to its management and employees, Division 726 is paying a merger-related bonus to seven people, from the CEO to member service reps, that is the same amount: $41,500 each. That amount will be paid to Manager James Sugrue, and then to six other MSRs. A seventh MSR will receive severance of $9,500. 

Division 726 FCU posted a loss of $59,941 as of March 31, with net worth of 16.78%.  EGFCU had net income of $18,677 as of Q1, with net worth of 10.78%. 

CU Being Acquired Has the Better Bottom Line

Merging Credit Union: Emery FCU, Cincinnati

Assets: $200.5 million

Members: 12,889

Year Founded:  1939

Member Vote: July 8

Acquiring Credit Union: Sharefax Credit Union, Cincinnati

Assets: $522.7 million

Members: 32,163

Emery FCU told members the merger would provide better pricing and services, additional products, enhanced convenience and lower operating costs. It also cited six additional branches, and said its three branches would remain open. 

“By joining together, Emery Federal Credit Union and Sharefax Credit Union will retain their members-first philosophy and be better positioned to serve members now and into the future,” the board told the EFCU membership.

Emery FCU is more profitable than the credit union that is acquiring it, which is 2.5x larger, reporting $205,632 in net income for Q1, with net worth of 8.69%. It had $1.24 million in net income at year-end 2024. Sharefax CU reported $92,262 in net income as of the same date, with net worth of 9.68%. SCU had $1.14 million in net income as of the end of 2024.