RICHMOND, Ind.–The first review of CU mergers planned for 2024 finds numerous CUs that have been in the red, including one of the acquirers; a CU that said its president, manager, treasurer, loan officers and other personnel were all resigning; bonuses for senior staff at several CUs, including one that lost money, a combination of two CUs more than 600 miles apart, and the end for a credit union that began in the treasurer’s garage.
This is the first of a two-part series.
WUFFACE Asks Members to Face Up to Merger
Merging Credit Union: WUFFACE FCU, Richmond, Ind.
Assets: $6.6 million
Members: 747
Year Chartered:
Date of Member Vote: Jan. 11
Acquiring Credit Union: Kemba Credit Union, Westchester, Ohio
Assets: $1.95-billion
Members: 126,944
In its message to members, the board said the merger is desirable because Kemba CU has a “similar operating style and philosophy, has federally insured deposit accounts, has a convenient office for WUFFACE members, offers full-service financial services, is financially sound and well-established, and has a solid membership base.”
WUFFACE FCU reported $11,908 in net income at year-end, with net worth of 8.88%.
KEMBA Credit Union, which was founded to serve employees of Kroger’s supermarkets and which is headquartered 177 miles to the east, reported $4.829 million in net income and net worth of 11.12% as of Sept. 30, 2023.
4 Reasons Cited; Special Dividend to be Paid
Merging Credit Union: Maumee Educators FCU, Maumee, Ohio
Assets: $1.7 million
Members: 281
Year Chartered: 1963
Date of Member Vote: Jan. 31
Acquiring Credit Union: Educational Community Alliance Credit Union, Toledo, Ohio
Assets: $62.13 million
Members: 5,631
Maumee Educators FCU cited four reasons for seeking to merge:
- Improved account access, including more than 5,000 shared branch locations and a surcharge-free ATM network
- Additional products and services, including checking, IRAs, MMAs, credit cards and more. It will also be able to offer online and mobile banking
- Leadership Continuity: Maumee Educators said its senior leadership is expected to retire and “recruiting a replacement either internally or externally is not feasible”
- Education industry focused
Special Dividend to be Paid
Maumee Educators said it will pay a special dividend of $120,000 to members if the merger is approved based on aggregate balances of share accounts for each member.
The credit union noted its current facilities costs are paid by the Maumee Board of Education and that after the merger that is unlikely, so its facility may “no longer be available.”
Through Sept. 30, 2023, Maumee Educators reported a loss of $11,094, with capital at 21.48%. ECACU posted $233,747 in net income and capital of 10.43% as of the same date.
Everyone is Resigning at One CU
Merging Credit Union: Bergen Division FCU, Toms River, N.J.
Assets: $14.1 million
Members: 1,378
Year Chartered: 1962
Date of Member Vote: Feb. 9
Acquiring Credit Union: N.J.T. Employees FCU, Waldwick, N.J.
Assets: $19.3
Members: 1,252
Bergen Division FCU’s board told its members the merger is in their best interests because it will allow it to provide better service.
“We have been unable to provide a satisfactory service in the past several months,” the credit union stated. Also, the president, the manager, treasurer, loan officers and other personnel will be resigning from their positions.”
The credit union said its main office will close if the merger is approved, but that other offices inside Transit Authority facilities will remain open.
Through Sept. 30, BDFCU reported $17,868 in net income, with capital at 14.43%. It does not plan any net worth distribution. N.J.T. Employees CU reported $35,691 in net income and capital of 10.32% as of the same date.
‘Potential’ for Better Rates is Cited
Merging Credit Union: Flasher Community CU, Flasher, N.D.
Assets: $13.36 million
Members: 719
Year Chartered: 1939
Date of Member Vote:
Acquiring Credit Union: Capital CU, Bismarck, N.D.
Assets: $741.2 million
Members: 31,433
Like many CUs, Flasher Community cited “the ability to offer additional products and services” as a reason for seeking to merge, along with “potential lower loan rates, potential higher dividends, more convenient locations, additional tech offerings and more “bench strength” in critical areas.
The credit union said its main office will remain open if the combination is approved.
Through Q3 2023, Flasher Community reported $71,770 in net income, with capital at 9.56%. Capital CU posted net income of $5.15 million and net worth of 12.62% as of the same date.
‘We Do Not Have the Resources Necessary’
Merging Credit Union: KGC FCU, Knox, Penn.
Assets: $9.3 million
Members: 1,740
Year Chartered: 1960
Date of Member Vote:
Acquiring Credit Union: Priority First FCU, Du Bois, Penn.
Assets: $131 million
Members: 13,380
In a long letter to members signed by members of the board and the CU’s manager, KGC FCU shared how it had been founded in 1960 with eight charter members as Knox Glass Containers FCU, beginning its operations in the original treasurer’s garage.
In 2008 it expanded to a community charter.
“Over the years it has become more and more difficult to stay on top of new technology and advances while still providing the financial services needed by our members,” the letter reads. “Additionally, the loss of key staff last year made it even tougher to meet those standards. During this time the board reached out to other credit unions and Priority First FCU agreed to provide operational and staffing assistance…
“However, we still do not have the resources necessary to offer some of the products and services needed by our members,” the letter continues.
As expected, in listing the reasons it is seeking to merge, the board pointed to the expanded services available through Priority First, expanded branch and ATM access, and economies of scale.
Through Sept. 30, 2023, KGC FCU reported $231,111 in net income, with net worth of 8.74%. Priority First had $2 million in net income and net worth of 10.21% as of the same date.
A Fill-in-the-Blanks Disclosure to Members
Merging Credit Union: United CU, Council Bluffs, Iowa
Assets: $19.2 million
Members: 1,830
Year Chartered: 1953
Date of Member Vote: Feb. 12
Acquiring Credit Union: Midland CU, Urbandale, Iowa
Assets: $82.3 million
Members: 5,126
In what was basically a form letter, United CU told members it needed to merge due to declining membership and the erosion of its loan portfolio over the past several years, while saying the merger would bring members “additional products and services” it has been unable to offer.
UCU said its main office will remain open should the merger be approved.
United Credit Union posted a loss of $362,972 through Sept. 30, with net worth standing at 8.88%. Midland Credit Union had $291,962 in net income and capital of 10.86% as of the same date.
A Health Care CU That Says It Needs a Transplant
Merging Credit Union: Health Care Idaho CU, Boise, Idaho
Assets: $13.1 million
Members: 1,277
Year Chartered: 1961
Date of Member Vote: Feb. 15
Acquiring Credit Union: Idaho Central CU, Chubbuck, Idaho
Assets: $10.7 billion
Members: 597,973
Health Care Idaho CU cited four reasons members should vote in favor of the merger:
- “It is increasingly difficult to keep up with regulatory change.”
- “It is increasingly difficult to offer competitive salaries and benefits to the employees who service accounts.”
- “You deserve the latest technology to access and protect your accounts,” which is “out of reach” for ICCU.
- “We believe Idaho Central Credit Union is a great choice for a merger and they will pick up where Health Care Idaho Credit Union left off and take you into the future.”
Through the third quarter of 2023, Heath Care Idaho’s bottom line wasn’t so healthy, as it reported a loss of $66,567 to go with capital of 11.26%. Idaho Central posted $61.65 million in net income and capital of 7.7% as of the same date.
A Merger in the Heart of Louisiana
Merging Credit Union: Avoyelles Parish School Board Employees FCU, Marksville, La.
Assets: $1.88 million
Members: 347
Year Chartered: 1966
Date of Member Vote: Feb. 15
Acquiring Credit Union: Heart of Louisiana FCU, Pineville, La.
Assets: $136.1 million
Members: 16,501
In its message to members, Avoyelles Parish School Board EFCU share the standard list of a “robust” menu of products and services and a “stronger” credit union as the reasons members should vote in favor if the deal.
APSBEFCU lost $19,480 through Q3 of 2023, with net worth of 25.05% (it indicated it does not plan to return any capital to members). Heart of Louisiana had $784,643 in net income and capital of 14.84% as of Sept. 30.
Bonus to be Paid if Merger Approved
Merging Credit Union: St. Elizabeth CU, Northampton, Penn.
Assets: $10.1 million
Members: 529
Year Chartered: 1934
Date of Member Vote: Feb. 15
Acquiring Credit Union: First Commonwealth FCU, Allentown, Penn.
Assets: $1.1 billion
Members: 80,321
In its statement to members, St. Elizabeth CU said, “Assessing the needs of our members over the years, St. Elizabeth Credit Union sought opportunities to offer better physical infrastructure, additional products and services which include checking accounts, and a more modern and competitive banking service platform. First Commonwealth FCU shares St. Elizabeth’s vision for delivery of innovative products and services…”
St. Elizabeth CU said if the merger is approved, it will pay out a bonus dividend of 1.4% on share balances, or $107,000 in total.
SECU had $90,172 in net income through the third quarter of last year, with capital of 24.44%. First Commonwealth had $5.3 million in net income and capital of 10.55% as of the same date.
Two CUs, Both in the Red to Merge; Acquiring CU Already Running the Other
Merging Credit Union: Springdale P.P.G. FCU, Springdale, Penn.
Assets: $847,410
Members: 217
Year Chartered: 1959
Date of Member Vote: Feb. 17
Acquiring Credit Union: PPG & Associates FCU, Creighton, Penn.
In proposing members vote in favor of the combination, P.P.G. FCU’s board said in addition to expanding product offerings, PPG & Associates FCU has been operating the CU since November of 2022. In addition, the two CUs have a similar field of membership, the notice to members states, adding that the manager of P.P.G. FCU has retired and there has been difficulty in maintaining an active board of directors.
Through Q3 of 2023, Springdale P.P.G. FCU showed a loss of $15,044, with net worth of 27.20%. PPG & Associates also posted red numbers, showing a loss of $1,700, with capital of 13.72% as of the same date.
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