UPPER DARBY, Penn.–A half-dozen more credit union mergers have been proposed, with nearly all involving smaller CUs and several citing a lack of succession planning as one big problem, according to forms filed with NCUA.
In Upper Darby, Penn., the $15.1-million Delco Postal Credit Union which has approximately 1,312 members, is seeking to merge into the $41.4-million Forge FCU, which has approximately 3,300 members.
In its disclosure statement filed with NCUA, Delco Postal said, “the board of directors has concluded that the proposed merger is desirable and in the best interests of members because of the expanded products and services, the location with expanded membership hours and the dedication of the continuing credit union to serving a SEG-based membership.”
Delco Postal reported $148,339 in net income on its Sept. 30, 2021 call report, with net worth of 11.46%. Forge FCU reported net income of $909,464 and net worth of 21.15% on the same date.
Delco Postal said it does not plan to pay out any of its capital to its members, but two of its employees will receive merger-related compensation, including:
- MSR Thomas Miller, with a maximum severance of $33,280 if terminated without cause in the 12 months following the merger
- MSR Rita Miller, with a maximum severance of $39,291 if terminated without cause in the 12 months following the merger
Delco Postal has scheduled a member vote for March 2.
In Texas, Pandemic’s Effects Cited
In Houston, the $25-million C-E FCU said it will hold a membership meeting on Feb. 28 to conduct a vote on merging into the Galveston-based, $77-million Coastal Community FCU.
In its statement to members outlining the reasons for the merger, the credit union said its board believes it will result in better pricing and services, additional products enhanced convenience, improved account access and lower operating costs.
It further said the COVID pandemic has “dramatically impacted” all financial institutions and that its loan balances declined more than $3 million in 2020, which represented approximately 20% of its loan portfolio. The credit union said it held merger discussions with three credit unions before selecting Coastal Community.
C-E FCU reported a net loss of $53,686 on its Sept. 30 call report and net worth of 7.06%. Coastal Community CU reported net income of $426,974 and net worth of 7.69% as of the same date.
C-E FCU said its one branch will become a branch of Coastal and that members of its board will be offered positions on the Coastal Board or on a “support committee.”
C-E FCU said there will be no distribution of net worth to members as a result of the merger and did not indicate any plans for merger-related payouts to members or the board of C-E FCU.
Out of Diamonds in Diamond Bar
In Diamond Bar, Calif., the $23-million Pacific FCU said it will host a membership meeting on Jan. 25 as it seeks to merge into the $2.2-billion Arrowhead Central Credit Union in Rancho Cucamonga, Calif.
In its disclosure to members, Pacific Federal said it is seeking to merge to offer additional convenience and services, including mobile access, to members, while also seeing improved economies of scale.
Pacific FCU said none of its employees will continue with Arrowhead Central if the merger is completed.
Pacific FCU reported a net loss of $196,548 on its Sept. 30, 2021 call report, with net worth of 11.63%. Arrowhead Central reported net income of $12.1 million and net worth of 10.13%.
Pacific FCU said there will be no distribution of net worth to members as a result of the merger and indicated no merger-related payout to board or management.
Penn. CU Says It’s ‘Stagnant’
In Monroeville, Penn., the $902,826-Monroeville Boro FCU has set a special meeting for Feb. 23 on a vote to merge into the $265-million USX FCU in Cranberry Township, Penn.
MBFCU in its NCUA disclosure forms said it is merging to provide improved products, services, branches and more for members and included in its form a detailed listing of how its offerings compare to those of USX FCU.
“The manager of Monroeville Boro FCU has retired and there is no successor,” the credit union said. “Monroeville Boro FCU lacks the resources to implement and maintain the online services and account accessibility services which present and potential members are seeking. Monroeville Boro FCU assets and membership continue to be stagnant.”
Given it has net worth north of 17.5%, Monroeville Boro FCU said if the merger is approved it plans to pay a bonus dividend to its member sufficient to reduce its net worth to 12%.
MBFCU reported a net loss of $8,706 as of Sept. 30, 2021. USX FCU reported net income of $661,348 and net worth of 11.29% as of the same date.
MBFCU said no employees will be offered jobs by USX FCU and that there would be no merger-related payout to board members or management.
Minnesota CU Points to ‘Values’
In St. Paul, Minn., the $9.7-million H.B.I. Employees CU said it is seeking to merge into the $1.83-billion SPIRE Credit Union in Falcon Heights, Minn., and it has set a date of Feb. 23 for a virtual meeting to vote on the combination.
In its statement to members, H.B.I. Employees said the merger provides our members with more products, services, and locations. Our values align with SPIRE credit union values. This merger will not only benefit our members/owners, but also our community and employees with the alignment of our values.”
H.B.I. Employees reported a net loss of $5,596 on its Sept. 30 call report with net worth of 10.25%. SPIRE CU reported net income of $17.4 million and net worth of 8.51% as of the same date.
H.B.I. ECU said there are no plans to distribute any of its net worth, but that its member share account par value is $5 while SPIRE CU’s is $10, and as a result with the merger each member will receive a $5 deposit in their share account to account for the difference.
H.B.I. ECU also indicated there would be no merger-related payout to board members or management.
Maryland CU Cites ‘Strong Social Responsibility’
In Pocomoke City, Md., the $2.6-million Wor-Co FCU, which has approximately 612 members, has scheduled a Feb. 22 member meeting to consider a merger into the $1.24-billion First Financial of Maryland FCU in Sparks, Md.
In its member disclosure filed with NCUA, Wor-Co cited improved products and services, but also said the “combined credit union will also bring its strong social responsibility to the communities served by Wor-Co FCU through volunteer service, financial education and grants and donations to individuals, families and the community.
Wor-Co FCU indicated it would not be distributing any net worth and that no volunteers or members of management would be paid merger-related compensation.
At year-end 2021, Wor-Co FCU reported a net loss of $17,773 with net worth of 9.20%, while as of Sept. 30, 2021 First Financial reported $2.1 million in net income and a robust net worth of 17.63%.
Pollock Employees CU New to Neighborhood
In Dallas, the $5.2-million Pollock Employees CU, which has under 1,000 members, has scheduled a virtual member meeting for Feb. 15 for consideration of a merger into the $1-billion Neighborhood Credit Union, which has approximately 59,000 members.
In its statement to members, PECU said it is merging because it has “not been able to provide the additional services, such as a website, home banking, remote deposit capture, person to person payments, etc. Additionally, the CEO is planning to retire and currently has no successor.”
The credit union said there are no plans to distribute any net worth to members, nor will there be any merger-related payout to volunteers or management.
Pollock Employees CU reported a net loss of $1,951 as of Sept. 30, 2021, with net worth of 10.9%. Neighborhood CU reported $8.4-million in net income and net worth of 9.52% as of the same date.