MIAMI–In part II of CUToday.info’s newest update on why credit unions say they have to merge, the review finds one CU’s chairman being paid a six-figure consulting fee, a promise from the acquiring CU it will upgrade and maintain a branch, size-related “challenges, and the end for the CU serving the only Macy’s in Montana.
In all, CUToday.info has updates on 19 credit unions that have filed merger-related disclosure forms with NCUA. This is part-two of a two-part series on these newest merger announcements. Part I can be found here.
Reports so far this year by CUToday.info include: Jan. 16, Jan. 17.
Merger Crosses State Lines; Chairman Getting Paid for ‘Merger Work’
Merging Credit Union: Law Enforcement & Technology FCU, Miami, Fla.
Assets: $54.7 million
Members: 4,891
Date Chartered: 1936
Date of Member Vote: June 3
Acquiring Credit Union: Justice FCU, Chantilly, Va.
Assets: $969.3 million
Members: 62,965
“The board of directors has concluded the proposed merger is desirable and in the members’ best interests because size matters in today’s banking,” LE&TFCU told members. “We are paying cost centers of a $100M FI at our current asset value. Since member funds to not remain on deposit long, it has diminished our ability to make loans and meet with the rigors of today’s regulatory requirements.”
Law Enforcement & Technology FCU pointed to expanded services and more branches across eight states, as among the other reasons to vote in favor.
In an unusual move, LE&TFCU’s chairman, Hector Mirabile, is being paid $125,000 for “merger work renumeration,” according to documents filed with NCUA.
Other Comp
Others receiving merger-related compensation include:
- EVP Tina Walters, who is being paid a $50,000 merger bonus
- COO Kennetha Sanchez, who is being paid a $50,000 merger bonus
- CEO James Angleton, who will be paid $212,433 as part of a contractual payout in his employment agreement
LE&TFCU posted $440,718 in 2023 net income, with net worth of 14.70% (there is no plan for a distribution). As of the same date, Justice FCU had $7.27 million in net income and capital of 12.60%.
A Promise to Improve the Branch
Merging Credit Union: Latrobe Area Hospital FCU, Latrobe, Penn.
Assets: $10.7 million
Members: 1,322
Date Chartered: 1964
Date of Member Vote: June 4
Acquiring Credit Union: Pheple FCU, Greenspring, Penn.
Assets: $117.3 million
Members: 16.976
Latrobe Area Hospital FCU told members the merger is based primarily on Pheple FCU’s ability to “provide our members additional services.” It said PFCU had also given it a “written guarantee” that it will maintain and upgrade its existing office.
LAHFCU said it will distribute a share adjustment amounting to $75 per member is the merger is approved.
Latrobe Area Hospital CU had $3,026 in net income during 2023, along with capital of 11.62%. Pheple FCU, meanwhile, had $365,781 and 9.11%, respectively, as of the same date.
A Florida CU Looks to Put New Charge in Growth
Merging Credit Union: Florida Rural Electric CU, Tallahassee, Fla.
Assets: $27.7 million
Members: 2,949
Date Chartered: 1991
Date of Member Vote: June 4
Acquiring Credit Union: Calhoun-Liberty Employees CU, Blountstown, Fla.
Assets: $123.1-million
Members: 6,354
Florida Rural Electric CU told members it needs to merge to drive additional economies of scale to increase financial strength, and to offer additional products, services and branches.
FRECU posted net income of $182,259 in 2023, with net worth at 21.74% (it does not plan to distribute any net worth). CLECU had net income of $1.4 million last year, with capital of 8.24%.
Inflation, Rising Rates Cited as Challenges
Merging Credit Union: Mississippi FCU, Jackson, Miss.
Assets: $164.5 million
Members: 22,848
Date Chartered: 996
Date of Member Vote: June 5
Acquiring Credit Union: Mutual FCU, Vicksburg, Miss.
Assets: $302 million
Members: 23,740
Mississippi FCU told members it and MFCU are “aligned in their objectives to broaden access to fair financial products and services that benefit all people, especially those of modest means. While both credit unions are well capitalized, they are not immune to the market forces influencing financial institutions today. The current inflationary, rising-rate environment accentuates the need for the merger.”
Mississippi Federal had $756,265 in net income during 2023, with net worth of 12.56%. Mutual FCU had $4.17 million in net income and capital of 13.12% as of the same date.
Looking for a Better Lane(co)
Merging Credit Union: Laneco FCU, Eugene, Ore.
Assets: $18.1 million
Members: 1.565
Date Chartered: 1958
Date of Member Vote: June 7
Acquiring Credit Union: Central Willamette CU, Albany, Ore.
Assets: $517.4 million
Members: 35,276
Laneco CU told members the merger will provide increased service, including eight branches, expanded consumer and commercial accounts, business service, more home mortgage and commercial real estate options and, for members of both credit unions, increased capital and financial strength as well as cost savings.
Through Q1, Laneco CU had $34,233 in net income to go with 8.23% net worth. Central Willamette CU closed 2023 with net income of $5 million and net worth of 15.13%.
Everything’s On Clearance: CU Serving Montana’s Lone Macy’s Says it Can’t Find New Manager
Merging Credit Union: MM Employees FCU, Missoula, Mont.
Assets: $1.5 million
Members: 344
Date Chartered: 1937
Date of Member Vote: June 10
Acquiring Credit Union: Montana Educators Credit Union, Missoula, Mont.
Assets: $26.9 million
Members: 1,540
MM Employees FCU said that its closed field of membership—it serves only Macy’s employees and their families—its inability to grow, along with the retirement of its manager of 47 years and inability to find a replacement, combined with the fact it can’t find volunteers to serve on the board, mean it needs to merge.
The location in Bozeman, Mont. is the only Macy’s in the state.
Through Q1 MM Employees FCU had $1,814 in net income, with net worth of 9.32%. At year-end 2023, MECU had $187,528 in net income and net worth of 8.67%.
Seeking Economies of Scale
Merging Credit Union: F.R.S.A. Credit Union, Orlando
Assets: $6 million
Members: 728
Date Chartered: 1975
Date of Member Vote: June 18
Acquiring Credit Union: Orlando Credit Union, Orlando
Assets: $332.7 million
Members: 25,866
F.R.S.A, CU was brief in its message to members, saying the merger will provide additional economies of scale, enhanced product and service lines, and more branches.
The credit union had $30,265 in net income during 2023, with capital of 9.27%. Orlando Credit Union closed the year with $4.6 million net income and capital of 8.13%.
For the Sake of Wellness (And to Relieve Burdens), WFCU Seeks Partner
Merging Credit Union: Wellness FCU, Hartford, Conn.
Assets: $30.1 million
Members: 4,271
Date Chartered: 1955
Date of Member Vote: June 20
Acquiring Credit Union: American Eagle Financial CU, East Hartford, Conn.
Assets: $2.69 billion
Members: 183,386
According to Wellness FCU, it needs to merge to position itself for the future as it has become “increasingly difficult for our small credit unio to meet financial demands for technology and the growing burden of federal regulatory compliance and cybersecurity.”
It cited expanded products, services and branches as benefits of the merger.
As of Dec. 31, Wellness FCU had $563,512 in net income and net worth of 9.96%. American Eagle, meanwhile had $13 million in net income and net worth of 8.62% as of the same date.
‘Confronted With Challenges,’ One Gov’t Employees CU Seeks to Combine With Another
Merging Credit Union: Rochester Area State Employees FCU, Rochester, N.Y.
Assets: $17.6 million
Members: 1,570
Date Chartered: 1935
Date of Member Vote: June 26
Acquiring Credit Union: Rochester & Monroe County Employees FCU, Rochester, N.Y.
Assets: $25.9 million
Members: 3,157
“We are confronted with the challenges of how to remain competitive and how to provide our members with the services they deserve now and in the future,” RASEFCU told members.
In response, it said a merger is the best option as it will “combine two credit unions that share similar roots, values and commitment to their members and who believe by joining together they can do more than either could do alone.”
A merger, said RASECU, would provide new products and services (including mobile banking and home equity loans), upgrades to current products and services, increased convenience and account access and additional branches.
The credit union said two of its members will serve on the board of Rochester & Monroe County Employees FCU.
Related to the merger, four people will receive longevity bonuses, including:
- Manager Carl Byers, $10,000
- MSR Karen Bready, $8,000
- MSR Marie Bruno, $30,000
- MSR William Shirtz, $10,000
Through March of this year, Rochester Area State Employees FCU had a loss of $9,208 (it posted a profit in 2023) and net worth of 10.78%. At year-end 2023, R&MCEFCU had $25,884 in net income and capital of 11.70%.
Seeking to Improve ‘Financial Strength’
Merging Credit Union: Reading Mass. Town Employees FCU, Reading, Mass.
Assets: $8.3 million
Members: 724
Date Chartered: 1975
Date of Member Vote: June 26
Acquiring Credit Union: Stoneham Municipal Employees FCU, Stoneham, Mass.
Assets: $62.4 million
Members: 3,930
Citing a shared philosophy, RMTEFCU said it needs to merge to provide a “wider variety of financial products and services,” as well as to “ensure long-term sustainability, improve financial strength and enhance member service.”
Reading Mass. Town Employees FCU posted a loss of $73,666 in 2023, with capital of 15.27%. Stoneham Municipal Employees had a much better year, with $437,164 in net income to go with 11.82% capital.