ALIQUIPPA, Penn.—Boards lamenting the limits of being a small CU, declining membership, a few member payouts from capital, and merger-related compensation for executives even at CUs that have been in the red can all be found in this latest round-up of what’s happening in credit union mergers.
This is part one in a two-part series based on the statements NCUA requires credit unions provide members when a merger is being proposed. Part II will appear on Friday.
With Membership Declining, a ‘Friendly’ Combo Proposed
Merging Credit Union: Aliquippa Teachers FCU, Aliquippa, Penn.
Assets: $131,327
Members: 122
Year Chartered: 1937
Date of Member Vote: May 26
Acquiring Credit Union: Friendly FCU, Aliquippa, Penn.
Assets: $68.2 million
Members: 4,472
Aliquippa Teachers FCU told members a merger was in their best interests due to a gradual decline in membership and because the combo will lead to more available services.
ATFCU said it will distribute a portion of its net worth representing approximately $17,000. It did not say how the funds would be distributed.
Aliquippa Teachers posted a loss of $248 as of Q1, with net worth of 34.46%. Friendly FCU posted $131,604 in net income during Q1, with net worth of 17.01%.
Merger Dividend of 1% to be Paid
Merging Credit Union: Rockford Municipal Employees CU, Rockford, Ill.
Assets: $23.7 million
Members: 2,102
Year Chartered: 1942
Date of Member Vote: May 26
Acquiring Credit Union: Rock Valley Credit Union, Loves Park, Ill.
Assets: $178.2 million
Members: 15,767
The board of Rockford Municipal ECU told members they believe the merger “represents a prudent and a forward-looking strategy that will enhance member value, and ensure institutional stability, and expand community impact.”
It cited as benefits of the merger expanded services and products, enhanced accessibility via another branch, a better charter (it said its closed FOM limits its ability to grow and diversify), local orientation, alignment with membership needs, and “respect for legacy.”
Noting its minimum membership share deposit is $5, while at Rock Valley CU it’s $25, RMECU said it plans to pay a merger dividend of 1%, or $191,926,62 to members to be paid on June 30.
It also said all employees would be retained, and that VP Josie Winters will see a salary increase of $12,010 upon the merger.
RMECU had $50,218 in net income as of March 30, with net worth of 15.75%. Rock Valey CU. Rock Valley CU had net income of $54,644 and net worth of 11.24% as of the same date.
Convenience, ‘Enhanced’ Products Cited
Merging Credit Union: Strait View CU, Port Angeles, Wash.
Assets: $104.6 million
Members: 7,462
Year Chartered: 1939
Date of Member Vote: May 27
Acquiring Credit Union: Great Northwest FCU, Aberdeen, Wash.
Assets: $267.1 million
Members: 18,694
According to Strait View CU, benefits of merging will include:
- Increased convenience and improved service resulting from the additional five branch locations in Southwest Washington
- New and enhanced products and services
- Expanded loan services through addition loan types, including business loans
- Increased convenience resulting from expanded online services, electronic delivery systems, and continue investment in technology to improve the member experience.
It said benefits to GNWFCU members includes the addition of one branch in Port Angeles, and “increased returns to member (sic) from additional capital, savings and efficiencies of the merged credit unions.
It also cited four additional benefits to members of both CUs that largely mirrored the prior benefits cited.
There will be no capital distribution, with Strait View CU saying its board believes “retention of the net worth better serves the SVCU members long term…”
Merger-Related Comp
In conjunction with the merger, SVCU said its CEO, Lisa Roening, will be paid $1,000 for each of her 47 years of service to the credit union, for a total of $47,000.
Strait View CU had $231,635 in net income and net worth of 13.88% during Q1. Great Northwest FCU had $491,543 in net income and net worth of 17.43% as of the same date.
Merging CU to be Operated as a ‘Division’ for 2 Years
Merging Credit Union: MAC Federal Credit Union, Fairbanks, Alaska
Assets: $175.8-million
Members: 18,242
Year Chartered: 1952
Date of Member Vote: May 28
Acquiring Credit Union: Credit Union 1, Anchorage, Alaska
Assets: $1.53 billion
Members: 96,058
“The board of directors has concluded that the proposed merger is desirable and in the best interests of members as the merger combines the strengths and resources of the two credit unions to better serve the members in an increasingly competitive environment” members were told.
Three benefits of merging were cited, including:
- Operational cost savings and expanded service operations
- Increased accessibility to retail banking services through the addition of CU1s 15 branches and more than 59 ATMs, plus access to the CO-OP Network ATMs.
- Expanded impact and support for Alaskans through the “continuing credit union’s community impact commitment, including donations to Alaskan non-profit organizations, scholarships to members, And employee volunteer hours.”
The credit union said three MAC branches will be operated as “MAC, a Division of Credit Union 1,” for two years, while its Fort Wainwright branch will operate under that designation or five years.
MAC Credit union had $421,495 in net income during the first quarter, with net worth of 11.40%. Credit Union 1 reported $5.38 million in net income and had net worth of 14.36% as of the same date.
‘Strong Geographic Fit,’ More Branches Named Among Benefits
Merging Credit Union: MetroWest Community Credit Union, Framingham, Mass.
Assets: $146.5 million
Members: 7,000
Year Chartered: 1941
Date of Member Vote: June 3
Acquiring Credit Union: St. Mary’s Credit Union, Marlborough, Mass.
Assets: $1.042 billion
Members: 56,730
MetroWest Community CU told members the proposed merger is in their best interests because, “There is a strong geographic fit that will provide seven additional branches for MetroWest members. Joining St. Mary’s Credit Union will expand the products and services offered to the membership. St. Mary’s Credit Union has enhanced digital banking, online account opening, and payments services. Saint Mary’s Credit Union also has a highly rated service model, which includes a local call center. Many MetroWest members already bank with St. Mary’s Credit Union, and Metro West feels that St. Mary’s is culturally the best fit to serve the membership going forward…”
It added that the keeping the name St. Mary’s Credit Union for the combined CU “reflects a more inclusive representation of the combined membership and aligns with the shared vision for the future credit union.”
As of March 30, MetroWest Community CU had $182,058 in net income, with net worth of 8.62%. St. Mary’s CU had $486,632 in net income and net worth of 11.42% as of the same date.
CFO’s Exit Leads to Merger Pursuit
Merging Credit Union: St. Athanasius Credit Union, Jesup, Iowa
Assets: $489,619
Members: 226
Year Chartered: 1953
Date of Member Vote: June 8
Acquiring Credit Union: CORDA Credit Union, Cedar Rapids, Iowa
Assets: $748.8 million
Members: 27,148
St. Athanasius CU said it has sought to merge with a “like-minded financial institution,” and that its decision to pursue a combination follows the exit of its CFO. “Rather than simply filling the role, we determined that a merger would est serve our members by strengthening financial resources, enhancing operational support, and ensuring continued stability in an evolving financial landscape,” the SACU board said.
St. Athanasius CU said its lone office will close upon completion of the merger.
SACU had net income of $368 as of Q1, with net worth of 21.67% (it said there would be no distribution). CORDA CU had $1 million in net income and net worth of 9.68% as of the same date.
‘Small Size and Limited Resources’
Merging Credit Union: Pueblo Government Agencies FCU, Pueblo, Colo.
Assets: $44 million
Members: 2,939
Year Chartered: 1936
Date of Member Vote: June 10
Acquiring Credit Union: Air Academy CU, Colorado Springs, Colo.
Assets: $825.4 million
Members: 43,990
“PGA’s small size and limited resources ha e prevented us from offering members a full range of financial services and a robust online banking experience,” Pueblo Government Agencies FCU told its members.
It said benefits of the merger would include more ATMs (including the CO-OP Network), shared branches, “robust” online a mobile banking platforms, expanded AACU branches, access to mortgages, commercial loans, insurance services and more.
It added the merger would benefit AACU by bringing “to the continuing credit union a dedicated and loyal membership.”
Pueblo Government Agencies had $165,015 in net income as of March 30, with net worth of 12.69%. AACU had $509,870 in net income to go with net worth of 8.44%.
