PALM COAST, Fla.–In part II of this latest review of credit unions seeking to merge, CUToday.info has found nearly all are below $10 million in assets (just two are between $40-$100 million in assets), and again uncovers CUs unable to find new managers, saying they simply can’t afford new technology (two of the CUs don’t have websites) and, in one case, one offering a pretty unique formula for how it determined net worth should not be returned to members.
Part I in this series examining the 18 most recent CU merger disclosure forms filed with NCUA can be found here.
New Brand is Planned
Merging Credit Union: Penn Wilco FCU, Wilkes Barre, Penn.
Assets: $13.1 million
Members: 427
Date Founded: 1938
Date of Member Vote: July 18
Acquiring Credit Union: U.F.C.W Community FCU, Wyoming, Penn.
Assets: $173.4 million
Members: 18,022
Penn Wilco FCU said it is seeking to merge because it has an aging membership, and a decreasing number of people employed by sponsor PPL, which has resulted in a shrinking of membership.
“Loan demand is limited. Adding new services has been cost prohibitive due to our size,” PWFCU told members. “Since we already share office space, a data processing system and staff with U.F.C.W. Local 72 FCU, this merger will enable Pen Willco FCU members to retain the efficient, personal service on which we pride ourselves.”
The credit union said after the merger the two CUs will rebrand as Earning Tree FCU, and it will be more “technologically competitive.”
Penn Wilco FCU reported $8,061 in net income during the first quarter, with capital of 12.85%. UFCW Community reported $489,676 in first quarter net income to go with capital at 10.78%.
Additional Resources, Branches Cited
Merging Credit Union: Monrovia City FCU, Monrovia, Calif.
Assets: $3.982 million
Members: 505
Date Founded: 1954
Date of Member Vote: July 18
Acquiring Credit Union: Foothill FCU, Arcadia, Calif.
Assets: $723.8 million
Members: 31,765
In its message to members, the board of Monrovia City FCU said a larger credit union will provide additional resources for great service, competitive rates, new products and services and new technology. It also listed additional branch access and Saturday hours as benefits.
Monrovia City FCU reported a loss $3,551 for the first quarter with 8.34% capital. Foothill FCU posted $1.396 million in net income for Q1, with capital at 11.43%.
Access to ‘Relevant’ Technology
Merging Credit Union: St. Mary’s & Affiliates CU, Madison, Wis.
Assets: $36.4 million
Members: 3,579
Date Founded: 1959
Date of Member Vote: July 19
Acquiring Credit Union: Heartland CU, Madison, Wis.
Assets: $595.6 million
Members: 33,287
In brief, St. Mary’s CU told its members the CU needs to merge because it will “give members access to relevant technology as well as product and services offerings to effectively serve members into the future.”
St. Mary’s said it intends to keep its two offices open after the merger, while members will have access to 11 Heartland CU locations.
SMCU reported $74,934 in net income for the first quarter, with capital at 10.14% (there are no plans to distribute any net worth, the CU said). Heartland CU had $1.089 million in net income and capital of 9.67% as of the same date.
Citing COVID Effects, CU Reaches Across State Line
Merging Credit Union: IBEW 116 FCU, Fort Worth, Texas
Assets: $3.479 million
Members: 856
Date Founded: 1969
Date of Member Vote: July 20
Acquiring Credit Union: Carter FCU, Springhill, La.
Assets: $685.7 million
Members: 52,032
“The economic fallout from the COVID 19 pandemic sparked a downward trend in earnings that IBEW 116 FCU has not been able to correct,” the credit union, which has fallen below 7% capital, told members. “The board of directors has concluded the proposed merger is in the best interests of members…(and) will benefit their respective memberships by achieving operational cost savings and improving the operational and financial strength of the continuing credit union, ultimately enhancing member value.”
After listing other benefits such as new products and services and “state-of-the-art” mobile and online banking, IBEW 116 FCU said its manager of 37 years, Charisse Miller, plans to retire, while its other employee, Mendy Simmons, who has been with the CU for 21 years, will remain on.
For Q1, IBEW 116 posted a $12,863 loss, with capital at 6.27%. Carter FCU has $1.398 million in net income and net worth of 9.26%.
Similar Names to Merge; Unusual Formula Around Net Worth Distribut9ion
Merging Credit Union: Simplot Employees CU, Caldwell, Idaho
Assets: $21.8 million
Members: 4,384
Date Founded: 1956
Date of Member Vote: July 24
Acquiring Credit Union: Pocatello Simplot CU, Pocatello, Idaho
Assets: $36.3 million
Members: 2,065
Simplot Employees CU cited operational cost savings, improved financial strength, increased convenience and service, expanded products and services, and increased returns to members “from additional capital and savings efficiencies of the merged credit unions” in presenting its case to members.
While SECU has a 15.13% net worth ratio as of Q1, it said there will be no distribution because it is the “opinion of the board” that “based on the current financial and statistical reports, the credit unions have made a joint appraisal of assets and liabilities to determine the value of shares in each credit union. An analysis of the share values of SECU, PSCU and the combined market value probably asset/share ratio value of the continuing credit union are as follows: SECU 114.8%; PSCU 124.1%; and continuing credit union 119.8%. The credit unions have determined that the shares in each credit union are substantially equal in value and no share adjustments are warranted.”
Simplot Employees CU posted $56,006 in net income for the first quarter. Pocatello Simplot CU had $114,927 in first quarter net income, with capital at 21.69%.
Reg Burden, Need for More Expertise Cited
Merging Credit Union: Postal Government Employees FCU, Providence, R.I.
Assets: $52.2 million
Members: 2,526
Date Founded: 1994
Date of Member Vote: July 25
Acquiring Credit Union: Navigant Credit Union
Assets: $3.475 billion
Members: 140,780
In its disclosure statement to members, Postal Government Employees CU said the merger is in members’ best interests due to increased regulatory burden, a desire to offer additional products and services that require increased staff expertise, and the opportunity to generate greater efficiencies.
If approved, the PGEFCU branch will become the first for Navigant in the state’s capital.
The credit union said it does plan to distribute a portion of its capital to members in an amount not to exceed $1.47 million by paying a bonus dividend of 3%.
PGEFCU reported $168,973 in net income during the first quarter, with capital of 12.36%. Navigant CU had $6.384 million in net income with capital at 10.02% as of the same date.
A Teachers CU Does the Math
Merging Credit Union: Savastate Teachers FCU, Savannah, Ga.
Assets: $3.112 million
Members: 748
Date Founded: 1950
Date of Member Vote: August 21
Acquiring Credit Union: MembersFirst CU, Decatur, Ga.
Assets: $375 million
Members: 29.560
A merger will “result in greater efficiencies and economies of scale, will help increase financial stability, and will provide more and improved services to the members of Savastate Teachers FCU,” the credit union told members.
It added there will be no distribution of its 18.95% capital because the “combined net worth of both credit unions will be needed to offer expanded services to Savastate members.” Plans call for eventually closing the current Savastate FCU branch.
Two people will receive merger-related compensation: Manager Chinikqua Beard, who will get 20 weeks’ severance for $11,923.08; and Accountant Janice Alexander, who will get 14 weeks’ severance for $4,846.15.
As of Q1, Savastate Teachers reported a loss of $11,554. MembersFirst posted $822,817 in net income, with capital at 10.39% as of the same date.
One of 2 CUs Merging Into Air Academy FCU
Merging Credit Union: Routt FCU, Steamboat Springs, Colo.
Assets: $4.489 million
Members: 511
Date Founded: 1964
Date of Member Vote: August 28
Acquiring Credit Union: Air Academy FCU, Colorado Springs, Colo.
Assets: $925.4 million
Members: 47,676
As one of two credit unions currently planning to merge into Air Academy FCU, RFCU told its members, “Routt’s small size and limited resources have prevented us from offering members a full range of financial services and a robust online banking experience.”
It listed other reasons it says the merger is in their best interests, including that their current branch will remain open, more robust technology, expanded Atm access, additional branches and more.
Routt FCU reported $6,471 in first quarter net income, with capital at 10.26%. Air Academy FCU had $306,911 in net income, with capital at 7.53%.
Additional E-Services Named as Benefit
Merging Credit Union: Partners Financial FCU, Glen Allen, Va.
Assets: $94.9 million
Members: 8,058
Date Founded: 1958
Date of Member Vote: August 29
Acquiring Credit Union: Argent FCU, Chester, Va.
Assets: $418.4 million
Members: 27,923
Partners Financial told its members that a merger will give them increased access and convenience with four additional branches, a full-service call center and a “dedicated e-services department.” Other benefits, it said, include expanded product and services offerings, financial counseling and debt management.
Partners Financial FCU had $79,157 in net income through the first quarter, with capital at 7.71%. Argent FCU had $448,924 in net income, with capital of 8.08% as of the same date.
Earlier Reports
For additional information on other CUToday.info reports on mergers in credit unions, go here: January 20, Feb. 8, Feb. 9, March 20 and June 20.
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