LOWELL, Mass.–Two Massachusetts CUs are seeking to merge and to create what would be a billion-dollar credit union.
The $740-million Align Credit Union in Lowell, Mass., said it is seeking to merge in the $300-million Alltrust Credit Union in Fairhaven, Mass., to create a CU with approximately 42,000 members. Though half its size, Alltrust CU reported more than three times the net income of its larger partner in the merger, $1.586 million (net worth of 9.8%) at year-end 2021, compared to $410,048 and 10.06%, respectively, by Align CU.
Both credit unions were formed in 1922 to serve telephone workers (Align as Northern Massachusetts Telephone Workers Credit Union and Alltrust as Southern Massachusetts Telephone Workers Credit Union) and both are celebrating their 100th year anniversary.
In a statement on its website, Align CU said the decision to pursue a possible merger was “originated due to several criteria, including the similar telephone worker backgrounds of each credit union, their shared values, desire to deliver financial guidance and solutions to their members and the community, and a joint dedication to their employees and their careers.”
‘Synergies’ Cited
“The synergies between Align and Alltrust led us to this path of discovering the possibility of a merger,” said Ken Del Rossi, Align president and CEO, in a statement. “Our credit unions were each established as telephone worker credit unions and the merger would bring the amazing vision and culture of our credit unions together. Along with the shared goals, a merger would allow the combined credit union to realize economies of scale and strengthen our abilities to improve the products and services offered to our members.”
Added Alltrust President and CEO Carmen F. Sylvester, “We are excited to explore this potential opportunity to become stronger together. Both credit unions have spent countless hours researching and discussing this possibility, always keeping in mind the impact to our members, employees, and the community. Joining with Align would allow our members to enjoy expanded products and services, additional locations, and provide us with resources to remain competitive in the marketplace.”
Plans for Management
According to the credit unions, the merger plan calls for Sylvester to become CEO as part of the succession plan for both institutions, with Del Rossi and Sylvester working together through the merger and transition process for “several years.”
The credit unions said there will be no layoffs as a result of the merger, which they said would lead to greater resources to significantly advance the products and services offered, as well as support for members and community organizations.
The merger remains subject to a due diligence review by both credit unions, regulatory approval, and a vote by the membership of each CU.
Align and Alltrust Credit Union memberships. Each credit union will continue to operate under their current names and banking systems.
The credit unions have not yet submitted disclosure forms to NCUA related to any plans for any merger-related net worth distribution or compensation o executives.
Cornerstone Advisors is acting as a strategic advisor.