CLAREMONT, N.H.– An interesting interpretation of net worth ratios, big net worth ratios and no distributions, CU execs getting payouts and one CU stressing its manager will not get anything extra, and the usual pledges of promises of “better products and services” can all be found in this latest update in the CU Daily’s ongoing series on credit union mergers.
A Fill-in-the-Blanks Message to Members
Merging Credit Union: N.H. Community FCU, Claremont, N.H.
Assets: $13.3 million
Members: 1,467
Date Chartered: 1959
Date of Member Vote: Sept. 15
Acquiring Credit Union: Northern Lights FCU, St. Johnsbury, Vt.
Assets: $30.3-million
Members: 3,509
In a fill-in-the-blanks form, N.H. Community FCU simply told members a merger will give them “access to expanded product and services.”
It said its single office would remain open, and that another office would become available in Langon, N.H., about 20 miles away.
At mid-year, N.H. Community FCU posted net income of $72,047, with net worth of 9.73%. Northern Lights FCU had $201,846 in net income and net worth of 14.91%.
Another Small CU Looking to Merge into Credit Union 1
Merging Credit Union: CTA South FCU, Chicago
Assets: $1.1 million
Members: 526
Date Chartered:1960
Date of Member Vote: Sept. 16
Acquiring Credit Union: Credit Union 1, Lombard, Ill.
Assets: $1.94 billion
Members: 121,471
CTA South FCU is one of many credit unions seeking to merge into or being merged into Credit Union 1. As the CU Daily reported here, over one six-week period during the summer, members of six different credit unions voted on merging into the much larger Chicago CU, all of which went in favor.
The reasons for merging provided to members of CTA South FCU are the same bullet points provided in the other mergers, including:
- Expanded branch and ATM network
- Improved technology
- Expanded products & services
- Enhanced financial wellness options
- Enhanced operational back office
- Consistency through knowledgeable and friendly employees (all CTA South staff are to be retained)
- Improved cyber security
- National recognition through established partnerships
CTA South FCU posted a $358 loss as of mid-year, with net worth of 24.81% (it said no net worth distribution is planned). Credit Union 1 had $2.46 million in net income and net worth of 9.75%.
Can’t Keep Up With ‘Ever-Expanding’ Reg Requirements
Merging Credit Union: TSU FCU, Nashville, Tenn.
Assets: $1.15 million
Members: 366
Date Chartered: 1950
Date of Member Vote: Sept. 18.
Acquiring Credit Union: Cornerstone Financial CU, Nashville, Tenn.
Assets: $639.3 million
Members: 49,055
“TSU Federal Credit Union cannot continue to meet ever-expanding regulatory requirements from NCUA and cannot offer the array of products and services expected by members from their financial institution,” TSUFCU said in its message to members.
The credit union serves Tennessee State University.
“Cornerstone financial credit union can provide products and services that are consistent with those expected from credit union members. With six locations in the Middle Tennessee area, fee free withdrawals at thousands of ATMs available throughout the country, and digital banking that is available 24/7, accessing the services of cornerstone financial credit union will be easy for TSU Federal Credit Union members.”
TSUFCU had a midyear loss of $2,761, with net worth of 8.61%. Cornerstone Financial reported $3.63 million in net income and 10.5% net worth as of June 30.
More Valley Than Mountain in Bottom Line Performance
Merging Credit Union: Mountain Valley FCU, Peru, N.Y.
Assets: $56.9 million
Members: 4,606
Date Chartered: 1963
Date of Member Vote: Sept. 18
Acquiring Credit Union: AmeriCU, Rome, N.Y.
Assets: $2.82 billion
Members: 173,857
Mountain Valley FCU provided members with four bullet-pointed reasons to vote in favor of combining with AmeriCU:
- Greater array of financial services, including mortgages, home equity, auto, personal and student loans, along with small business services. It also cited high-rate checking, investment and insurance services, and free financial counseling, plus “many technological advances.”
- MVFCU’s four branches will remain open and its CEO, Maggie Pope, will serve as AVP-community engagement of the Mountain Valley region.
- Combined membership of 171,000 members, 25 locations and $2.7 billion in assets.
- The merger will allow the CUs to “deepen our shared commitment to philanthropy, volunteerism and financial literacy education.” Employees will also receive paid time off for volunteering.
Management Payout
The credit union said Pope will receive an upfront retention payment of $7,500 and another payment of $7,500 six months later, in addition to a $26,000 salary increase.
Mountain Valley posted a loss of $533,172 as of midyear, with net worth of 7.2%. AmeriCU had $4.5 million in net income and net worth of 9.5% as of June 30.
The NCUA database, incidentally, shows there were once three credit unions named Mountain Valley in the U.S. If the merger is approved, there will be no more.
Greater ‘Bargaining Power’ Among Reasons Cited for Combo
Merging Credit Union: Members 1st CU, Redding, Calif.
Assets: $356.2 million
Members: 23,969
Date Chartered: 1936
Date of Member Vote: Sept. 22.
Acquiring Credit Union: Rogue CU, Medford, Ore.
Assets: $3.7 billion
Members: 214,591
Members 1st CU’s board cited cost savings and financial strength as reasons to merge, along with increased convenience from 29 additional branches across Southern Oregon, Eastern Oregon and Idaho and California; new business and commercial products and services; expanded loan services, and expanded online services. It further said the larger asset size will give it greater “bargaining power.”
The two credit unions are approximately 150 miles apart.
Members 1st CU posted $2.2 million in net income at mid-year, with net worth of 9.97%. Rogue CU had $18.9 million in net income and net worth of 9.93% as of the same date.
CU in the Red, but A Payout for CEO
Merging Credit Union: Philadelphia Letter Carriers FCU, Philadelphia
Assets: $7.025 million
Members: 1,333
Date Chartered: 1947
Date of Member Vote: Sept. 25
Acquiring Credit Union: Eagle One FCU, Claymont, Del.
Assets: $88.5 million
Members: 8,894
Philadelphia Letter Carriers FCU, which is operating in the red, was as brief as a postcard in explaining why it needs to merge, saying the board concluded the merger is in the best interests of members “because Eagle One FCU has more resources and additional products and services available to efficiently and effectively service the members.”
PLCFCU said it will make a one-tome payment to Manager Rob Pino of $250,000 for “funding pension plan.”
Philadelphia Letter Carriers posted a $125,930 loss at mid-year, with net worth of 11.71% (it had net income of $15,045 at year-end 2024).
Eagle One FCF had $95,836 in net income at the end of Q2, with net worth of 10.18%.
Convenience, Service Cited as Member Benefits; Payouts to 5 Execs
Merging Credit Union: Community 1st Credit Union, Dupont, Wash.
Assets: $192.4 million
Members: 11,243
Date Chartered: 1934
Date of Member Vote: Sept. 26
Acquiring Credit Union: Harborstone Credit Union, Lakewood, Wash.
Assets: $2.2 billion
Members: 94,777
Community 1st said benefits to its members from the merger include increased convenience and improved service as the result of an additional 16 branches; access to a wider variety of products and servicers, and expansion of commercial services.
Benefits to Harborstone members, the CU said, include increased service and growth opportunities, increased lending opportunity leveraging the Community 1st Green Lending solution, and increased “returns to members from additional capital, savings and efficiencies the merged credit unions.”
Benefits to members of both CUs, Community 1st said, include “shared community values,” cost efficiencies and “greater market presence.”
Benefits for 5 Execs
There are merger-related financial benefits for five executives of Community 1st, including:
- CEO Dan LeFree. LeFree will be given a new title, South Sound Market President, at $275,000 per year. “If employment is terminated within five years other than for cause, Mr. LeFree will receive a termination payment equal to the amount of compensation that would have been paid for the remainder of the five year period.”
- Rebecca Rowe, director of facilities. Compensation will increase to $120,000 annually. If employment is terminated before end of contract term other than for cause, Ms. Rowe will receive a termination payment equal to one year’s compensation.” Note: the same termination payment terms apply to all the following individuals
- Michael Bagwell, project manager. Compensation will increase to $115,000 per year.
- Darcy Vander Voet, risk analyst. Compensation will increase to $120,000 per year.
- Nikki Lougheed. Vice president, technology implementation. Compensation will increase to $175,000 per year.
Community 1st had net income of $1,362 at mid-year, with net worth of 11.40%. Harborstone reported net income of $19.41 million as of June 30, with net worth of 11.53%.
An Interesting Statement on Two CUs’ Capital Positions
Merging Credit Union: Louviers FCU, Newark, Del.
Assets: $220.5-million
Members: 16,630
Date Chartered: 1968
Date of Member Vote: Sept. 30
Acquiring Credit Union: Del-One FCU, Dover, Del.
Assets: $730.9 million
Members: 89,412
Louviers FCU told members that while it remains strong, “the opportunities and efficiencies afforded by merging with a larger organization are undeniable.”
It said advantages of merging include:
- All FCU branches will remain open and the total number of branches will expand to 16
- It will be able to invest in “better service”
- It will be able to offer expanded and improved products and services
- It will offer expanded technology
- It will offer more “competitive” loan and deposit rates
- There will be more opportunities for employees (it said all would be retained).
Better Use of Capital
Louviers FCU’s net worth is nearly double that of Del-One, but it said there will be no payout to members because “any excess capital would be better utilized in supporting the expansion for the combined credit union. Investment of any excess capital will have a significantly more long-term impact on member service than a one-time dividend. In addition, analysis of the fair market value of the financials for Louviers Federal Credit Union demonstrated net worth ratios between the two organizations that were very closely aligned.”
LFCU posted a mid-year loss of $72,798, with net worth of 17.38%. Del-One FCU had $399,752 in net income and net worth of 8.56% as of the same date.
Some Unusual Resources Included in Disclosure; Plus, Unique Note on CEO Non-Payout
Merging Credit Union: White River CU, Rochester, Vt.
Assets: $51.5 million
Members: 3,952
Date Chartered: 1947
Date of Member Vote: Oct. 8
Acquiring Credit Union: 802 Credit Union, Barre, Vt.
Assets: $428 million
Members: 37,296
The board of White River CU told members the merger will:
- Improve the level of service to the membership
- Enhance the products and services
- Strengthen its financial position
- Create additional operational efficiencies by increased economies of scale, supporting sustainability
- Add convenience to the membership
In an unusual move for most merger disclosures, White River provided a link to 802 CU’s bylaws and also provided a full listing of its qualifications for membership. WRCU said all of its branches will remain open.
Nothing Extra for CEO
According to White River, its CEO, Wanda Dunham, will remain employed for five to six months after the merger is completed, after which she plans to retire. The credit union also noted, “There has not been any merger-related financial arrangements for Wanda Dunham; this includes both compensation and benefits. There has also not been any promised, planned or implied merger-related financial arrangements for Wanda Dunham. This statement also hods true for a period of two years prior to the date that the Board of Directors approved the merger plan.”
WRCU said there would be no merger-related compensation paid to any other employees or board members.
White River had $388,542 in net income as of mid-year, with net worth of 11.90%. 802 Credit Union had $3.26 million in net income and net worth of 12.25% as of the same date.
