ALEXANDRIA, Va.–Credit unions where the sponsor company is struggling. Difficulty finding a new CEO. A small town where two CUs are looking to be merge into another CU. A payout to three execs at a CU that’s losing money. And some unique credit union names that will be disappearing, plus one CU that found sunnier skies elsewhere. All of that and more can be found in part III of CUToday.info’s three-part series this week on the more than 30 most recent merger applications filed with NCUA.
As noted in part I and part II, the review has also found several CUs seeking to merge in multiple other CUs at once, combo’s in which the merging and acquiring CUs are both losing money, and several examples of credit unions reaching across state lines and even the country with merger partners.
Given the number of credit unions seeking to merge, CUToday.info—which has been providing the only ongoing, comprehensive review of CU mergers--has broken its analysis and review into the three parts.
Below is a look at the third cohort of CUs being featured as part of this latest update on the state of credit union mergers and disclosures to members, which NCUA requires of any credit union seeking to combine with another.
Sharing a ‘Core Purpose’
Merging Credit Union: Merritt FCU, Wilton, Conn.
Assets: $13.1 million
Members: 2,201
Year Chartered: 1941
Date of Member Vote: Nov. 30
Acquiring Credit Union: Sound FCU, Stamford, Conn.
Assets: $85.44 million
Members: 6,190
Merritt FCU’s board told members the merger will offer additional products, better pricing, and enhanced convenience and access. “These two organizations share a core purpose of advancing and promoting the interests of the public to empower people to achieve a brighter financial future,” the CUs said.
It said three members of its board will have the opportunity to serve in an emeritus role on the Sound FCU board, and that its CEO, Diane Heggland, will become an officer with the merged institutions.
Merritt FCU said there will be no net worth distribution due to one-time merger costs and the continuing CU’s “extensive infrastructure.”
MFCU had $16,848 in net income as of June 30, with net worth of 8.90%. While six times larger than the CU it is merging in, Sound FCU reported not much more in net income, at $22,642, with capital at 8.82%.
Bear Paw Has Bear Market Performance
Merging Credit Union: Bear Paw Credit Union, Havre, Mont.
Assets: $148.4 million
Members: 11,720
Year Chartered: 1942
Date of Member Vote: Dec. 1
Acquiring Credit Union: Altana FCU, Billings, Mont.
Assets: $404.7 million
Members: 24,465
The board of Bear Paw CU, which is struggling with a mid-year loss and low capital, told the CU’s members they should vote in favor of merging because they will be provided with a “full range of financial products and services for consumers and businesses,” including enhanced online banking and mobile access.
BPCU, which said its five offices would remain open, said there will be no net worth distribution.
Bear Paw CU posted a $278,596 loss as of mid-year, with capital at 6.17%. Altana FCU reported $1.3 million in net income and capital of 10.70% as of mid-year.
A Merger in the Heart of ‘Dixie’
Merging Credit Union: Dixie Craft Employees CU, Goodwater, Ala.
Assets: $1.3 million
Members: 591
Year Chartered:1974
Date of Member Vote: Dec. 1
Acquiring Credit Union: Heritage South CU, Sylacauga, Ala.
Assets: $176.7 million
Members: 14,772
Dixie Craft ECU told its members the merger is in their best interests because the continuing credit union “can offer many more products and services for the membership, including ATM access.”
DCECU said there will be no share distribution, but that its main office will remain open. It indicated there may be merger-related financial compensation paid to Manager Dinah Thomas, but it left the amount blank.
Dixie Craft showed a loss of $20,122 as of Q2, with capital at 12.72%. HSCU had $518,630 in net income, with capital of 8.81% as of the same date.
Merger Follows Inability to Find New CEO
Merging Credit Union: Hayward Community CU, Hayward, Wis.
Assets: $102.4 million
Members: 7,584
Year Chartered: 1935
Date of Member Vote: Dec. 1
Acquiring Credit Union: Superior Choice CU, Superior, Wis.
Assets: $624.2 million
Members: 32,103
In making its case for the merger, the HCCU board said the combination will provide members with numerous benefits, which it outlined in much more detail than the standard credit union disclosure form. But broadly, it said those benefits will include improved physical access in the form of 13 branches, plus surcharge-free ATMs; new products and services, and leadership continuity, Hayward Community said it is operating with an interim CEO and the board has been unsuccessful in filling the position on a full-time basis.
HCCU said there will be no net worth distribution, but EVP Kristin Tingo will receive $82,000 in retirement and severance pay.
At mid-year, Hayward Community posted $38,721 in net income, with net worth of 8.70%. SCCU showed $1.6 million in net income and net worth of 10.49% as of the same date.
Net Worth North of 32%, But…
Merging Credit Union: KAH Credit Union, Keokuk, Iowa
Assets: $1.5 million
Members: 417
Year Chartered: 1963
Date of Member Vote: Dec. 3
Acquiring Credit Union: AIM Credit Union, Dubuque, Iowa
Assets: $164.7 million
Members: 11,031
In citing its reasons for merging, the KAH CU board said that “given current conditions in our sponsor SEG, a merger with AIM Credit Union gives all members the opportunity to continue to be served locally with greater access to loans, products and services.”
In addition to KAHCU, AIM CU is simultaneously seeking to merge in another credit union (see below).
Despite net worth of 32.04%, KAH CU said there will be no net worth distribution “because the amount of new services that will be available to jour members that AIM has already paid for.” The CU noted one branch has already closed, but the other will remain open post-merger.
KAHCU had a $8,413 loss as of mid-year. AIM CU posted $733,577 in net income as of June 30, with capital at 11.74%.
One of Two CUs in Same Small Town Seeking to Merge
Merging Credit Union: The Hub-Co Credit Union, Keokuk, Iowa
Assets: $23.6 million
Members: 2,886
Year Chartered: 1938
Date of Member Vote: Dec. 3
Acquiring Credit Union: AIM Credit Union, Dubuque, Iowa
Assets: $165.7 million
Members: 11,031
The Hub-Co Credit Union is one of two CUs simultaneously seeking to merge into AIM Credit Union, with both holding their member votes on the merger at the same location—First Christian Church in Keokuk—on the same day. Both also use similar language in explaining their reasons for seeking to merge, with Hub-Co saying “given current conditions in management and staffing, a merger with AIM Credit Union gives all members the opportunity to continue to be served locally with greater access to loans, products and services.”
The Hub-Co CU said there will be no share distribution related to the merger.
The Hub-Co CU posted a loss of $9,928 as of mid-year, with capital at 8.78%. AIM CU posted $733,577 in net income as of June 30, with capital at 11.74%.
Payout Planned for 3 Execs
Merging Credit Union: Community Alliance Credit Union, Livonia, Mich.
Assets: $108.1 million
Members: 7,258
Year Chartered: 1966
Date of Member Vote: Dec. 6
Acquiring Credit Union: People Driven Credit Union, Southfield, Mich.
Assets: $354.7 million
Members: 21,000
According to Community Alliance CU’s statement to members, the merger will greatly enhance its offerings by providing more convenience and access to services through a larger branch network and improved technological infrastructure, improved financial stability, improved economies of scale, better opportunities for employee career growth, and a solidified plans for key leadership positions and the board.
With capital at 8.39%, CACU said there will be no net worth distribution, but it does plan to pay three people merger-related financial compensation, including:
- CEO Michelle Wollard, a separation benefit of $290,233.04
- CFO Andrea Badies, a maximum possible severance of $126,884
- Chief Experience Officer Stephen Schmitt, a maximum possible severance of up to $125,008.
Community Alliance CU reported a mid-year loss of $72,570, with capital at 8.39%.
CU Says It’s ‘Finding it Hard to Compete’
Merging Credit Union: Rivertown Community FCU, Grandville, Mich.
Assets: $78.5 million
Members: 5,200
Year Chartered: 1949
Date of Member Vote: Dec. 7
Acquiring Credit Union: Allegan CU, Allegan, Mich.
Assets: $83.6 million
Members: 6,708
Rivertown Community FCU and Allegan Credit Union have something in common: their CEO. Although the two CUs are similar in asset size, RCFCU said it has been finding it hard to compete in “today’s highly regulated, high-tech environment,” and it is unable to provide the options its members want.
“Allegan Credit Union is a similar-size organization that is also led by our president/CEO, Kristopher Lewis. Allegan is financially strong, offers a larger field of membership for members to refer others who do not otherwise qualify for membership at Rivertown Community FCU, shares the same common philosophies as our credit union, and has offered a commitment to retain our branch and serve our members,” RCFCU said in its statement.
The credit union said there will be no share distribution.
Rivertown Community reported $244,719 in mid-year net income, with net worth at 13.27%. Allegan Credit Union posted $2.124 million in net income, with net worth at 9.78% as of Sept. 30.
Weather Bureau FCU Seeks Sunnier Skies
Merging Credit Union: US Weather Bureau FCU, Westbury, N.Y.
Assets: $1.029 million
Members: 26,931
Year Chartered: 1964
Date of Member Vote: Dec. 7
Acquiring Credit Union: Department of Commerce FCU, Washington, D.C.
Assets: $859.6 million
Members: 99
In its forecast, U.S. Weather Bureau FCU said the merger will provide its members with additional products and services, and further noted it needs to merge because its board and management team plan to retire.
Despite capital of 19.79%, USWBFCU said there will be no net worth distribution.
US Weather Bureau reported a loss of $22,985 as of mid-year. DOCFCU had $3.689 million in net income with net worth of 8.25%.
‘Full Suite’ of Offerings Cited
Merging Credit Union: First Coast FCU, Jacksonville, Fla.
Assets: $10.9 million
Members: 1,695
Year Chartered: 1935
Date of Member Vote: Dec. 8
Acquiring Credit Union: VyStar Credit Union, Jacksonville, Fla.
Assets: $13 billion
Members: 829,287
First Coast FCU told its members the merger is in their best interests because VyStar CU will be able to “service members with its full suite of products and services and its entire branch network, which should improve members’ accessibility to services.”
It indicated there will be no share distribution.
First Coast posted net income of $42,975 as of June 30, with net worth of 11.22%. VyStar had $36.3 million in net income as of mid-year, with net worth of 9.87%.
At the End of the Parkway, A Merger
Merging Credit Union: Parkway FCU, Redford, Mich.
Assets: $26.6 million
Members: 2,205
Year Chartered: 1947
Date of Member Vote: Dec. 19
Acquiring Credit Union: Michigan Columbus FCU, Livonia, Mich.
Assets: $63.5 million
Members: 4,310
In its notice to members, Parkway FCU said the merger will provide a wider network of branches and ATMs, expanded products and services, including e-banking, and competitive rates. In addition, the resulting economies of scale will allow for the potential addition of more branches and ATMs, it said.
PFCU said there will be no distribution of net worth, because the “board of directors has determined a share adjustment or other distribution of Parkway Federal Credit Union’s net worth is unnecessary because ownership will be merged into and survive at Michigan Columbus FCU.”
PFCU said its branches will be retained.
Parkway Federal lost $274,854 as of mid-year, with net worth of 7.21%. Michigan Columbus FCU reported $148,032 in net income at mid-year, with capital of 9.89%.
Prior Reporting
CUToday.info has the most extensive reporting available on credit union mergers. Here are links to earlier reports:
Jan. 12
March 16
April 26
https://www.cutoday.info/Fresh-Today/What-Review-of-Latest-CU-Merger-Proposals-Reveals-Part-I
April 27
https://www.cutoday.info/Fresh-Today/What-Review-of-Latest-CU-Merger-Proposals-Reveals-Part-II
May 17
May 18
June 8
https://www.cutoday.info/Fresh-Today/Here-s-What-Latest-Disclosure-Forms-on-Proposed-CU-Mergers-Reveal
June 28
https://www.cutoday.info/Fresh-Today/A-Deceased-CEO-A-Big-Staff-Departure-No-Payout-Despite-High-Capital-A-We-Like-Them-Partner-Here-s-the-Latest-on-8-Proposed-CU-Mergers
Aug. 11
Aug. 10
https://www.cutoday.info/Fresh-Today/Challenges-Very-Difficult-to-Overcome-on-Our-Own-What-CUs-are-Saying-About-Mergers-Part-II
Aug. 9
Oct. 24
Oct. 25
The Very Best in CU Reporting. Every Morning. To Your Inbox. At a Total Cost of ‘Free!’
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com