ALEXANDRIA, Va.–None of the seven credit unions featured in Part II of this three-part series by CUToday.info reviewing the latest merger announcements are planning to distribute any capital, including one with net worth of more than 25%.
Most of the credit unions listed below are small and all cited similar challenges, with one essentially writing its own epitaph, “Unfortunately, a rapidly changing business climate and increasing regulatory burden have proven very difficult to overcome on our own.”
To allow readers to review what credit unions are telling members about their merger plans, as well to review some of the financials reported below, CUToday.info is breaking up this latest report into three parts featuring seven credit unions each.
Part I appears here. Part II appears below.
Merger Offers Many ‘Advantages,’ Says Michigan CU
Merging Credit Union: Calcite Credit Union, Rogers, Mich.
Assets: $125.4 million
Members: 9,427
Year Founded: 1961
Date of Member Vote: Sept. 12.
Acquiring Credit Union: Alpena-Alcona Area Credit Union, Alpena, Mich.
Assets: $571 million
Members: 33,041
Calcite told its members the merger is in their best interests because of the “advantages it would have for the value and sustainability for our membership, the community and staff…The partnership would allow new products and services to be introduced to the membership quickly and it would also offer improvements to the staff’s compensation and benefits package.”
CCU said there will be no capital distribution or payout to either board or management as a result of the merger.
Calcite CU reported $413,729 in net income for 2022’s first half, with net worth of 10.31%. AAACU posted $2.704 million in net income and net worth of 11.10% as of the same date.
After ‘Diligently Searching for Alternatives’ to Merger, CU Comes to a Bend in the River
Merging Credit Union: River Bend FCU, South Bend, Ind.
Assets: $6.77 million
Members: 804
Year Founded: 1949
Date of Member Vote: Sept. 13
Acquiring Credit Union: Communitywide FCU, South Bend, Ind.
Assets: $689.6 million
Members: 63,940
In its disclosure to members for why it needs to merge into Communitywide, Riverbend FCU said “to ensure continuity of operations while seeking to expand product offerings and improve services, we have been diligently searching to find alternatives. We have explored a wide range of options, including collaborating with like institutions to consolidate key support functions, maintaining the current course alone, or merging with a local, strong and proven performer. While there are some benefits with each option, only one meets the full range of our objectives: growth of membership, expansion of product offerings, infusion of investments in IT cybersecurity, improved staffing, and enhanced community service, and superior software enhancement.”
Riverbend FCU said there are no plans to distribute capital or make any merger-related payments to management or board members.
RCU reported a loss of $6,973 in 2022’s first six months, with capital of 15.42%. Communitywide CU posted $6.4 million in net income with net worth of 14.69% as of June 30.
In Alabama, Simple Reason for Merger Cited: ‘Our Manager is Retiring’
Merging Credit Union: O’Neal Credit Union, Birmingham, Ala.
Assets: $2.6 million
Members: 506
Year Founded: 1955
Date of Member Vote: Sept. 15
Acquiring Credit Union: Alatrust Credit Union, Hoover, Ala.
Assets: $180.6 million
Members: 12,262
In announcing the reason O’Neal Credit Union is seeking to merge, the credit union said simply, “The O’Neal Credit Union Manager is retiring and we feel that AlaTrust CU can offer more services to our members.”
O’Neal Credit Union reported net income of $2,590 for the first half of 2022, with capital at 24.64%. AlaTrust Credit Union had $1.047 million in net income and capital of 12.70% as of the same date.
In Kansas, ‘Rapidly Changing Business Climate’ is Cited
Merging Credit Union: UAW Mo-Kan FCU, Kansas City, Kan.
Assets: $5.09 million
Members: 1,269
Year Founded: 1950
Date of Member Vote: Sept. 18.
Acquiring Credit Union: Mainstreet FCU, Lenexa, Kan.
Assets: $638.9 million
Members: 71,545
In its statement to members, UAW Mo-Kan FCU said, “Over the past few years, management and the board of directors…have looked for ways to bring better financial products and an improved member experience to our members. Unfortunately, a rapidly changing business climate and increasing regulatory burden have proven very difficult to overcome on our own. The board determined the most efficient and effective way to meet the goals of providing better products and services was through a merger with a larger federally insured credit union equipped with the resources to make it possible.”
UAW Mo-Kan FCU reported a $58,589 loss, with capital of 6.67% as of June 30.
Given its low capital, credit union said there will be no distribution to members.
It said two employees will see increases in hourly pay in the move to Mainstreet FCU, and each will be paid a retention bonus of $500.
Mainstreet FCU posted $989,363 in net income, with capital of 8.05% as of mid-year.
25% Capital, But No Distribution as Mass. CU Seeks Merger
Merging Credit Union: Bedford VA FCU, Bedford, Mass.
Assets: $3.1 million
Members: 687
Year Founded: 196-
Date of Member Vote: Sept. 19
Acquiring Credit Union: Common Trust FCU, Woburn, Mass.
Assets: $55.4 million
Members: 2,943
Bedford VA FCU told its members the merger will offer expanded member services along with better technology and delivery channels and a second office location.
Despite high capital of 25.22%, BVAFCU said there will be no capital distribution or merger-related financial arrangements for management or the board.
Bedford VA posted a $16,196 loss for the year’s first half. Common Trust FCU posted $108,333 in net income during the first two quarters, with capital of 8.07%.
In Ohio, CU Sees Pathways to Offer New Options
Merging Credit Union: ODJFS FCU, Columbus, Ohio
Assets: $10.9 million
Members: 1,853
Year Founded: 1955
Date of Member Vote: Sept. 20 (to be held via a conference call and virtually). Members can also vote by mail or online.
Acquiring Credit Union: Pathways Financial CU, Columbus, Ohio
Assets: $591.6 million
Members: 53,258
In a Notice of Special meeting to its members, ODJFS said it is seeking to merge so its members can gain access to “many new products/services and enhanced electronic access to accounts, as well as access to 11 branches, 5,000 shared branches and surcharge-free ATMs.”
The form said no dividend will be paid and did not indicate any compensation to members of the board or management.
ODJFS FCU reported a loss of $18,080 for the first two quarters of 2022, with capital at 7.70%. Pathways Financial posted $3.004 million in income, with capital of 10.19% as of June 30.
Mo. CU Posts Loss, CEO to Get 3-Year Contract Following Merger
Merging Credit Union: Missouri Valley FCU, St. Peters, Mo.
Assets: $50.7 million
Members: 4,563
Year Founded: 1975
Date of Member Vote: Sept. 20
Acquiring Credit Union: West Community CU, O’Fallon, Mo.
Assets: $395.2 million
Members: 27,562
In its statement to members, Missouri Valley said a merger will allow it to better serve the membership on a larger scale while controlling costs, have the ability to offer additional products and services, and give it resources to offer advanced technology options.
MVFCU said there will be no share distribution. But current president/CEO Josh Rodriguez will be given a three-year employment contract at $135,000 annually.
Missouri Valley FCU saw a $69,577 loss during the first six months of the year, with capital of 7.27%.
Earlier Reports
CUToday.info reports on all mergers. Links to earlier reports are below:
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
June 28
August 9
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