ALEXANDRIA, Va.–In this the third part of a three-part series this week on mergers in CUToday.info, a number of CUs seeking to merge say they will make capital distributions—one of which is making the payout several months ahead of its member vote—while another says it can’t pay anything to members because the funds went to its three employees.
Other reasons being cited include management retirements and the opportunity to “expand products and services.”
Part I in this series can be found here; Part II is here.
In all, this latest review by CUToday.info, 21 separate merger proposals have been reviewed, some of which are not to be voted on until October.
Here is the final installment in this week’s series, including how the merging CUs have performed, who’s getting what and more.
Merging CU Says Its Size is ‘Too Modest’ to Offer Many Option
Merging Credit Union: Carnegie Mellon University FCU, Pittsburgh
Assets: $12.3 million
Members: 1,425
Year Founded: 1936
Date of Member Vote: Sept. 21
Acquiring Credit Union: Greater Pittsburgh FCU, Pittsburgh
Assets: $67.1 million
Members: 9,111
Carnegie Mellon University FCU told members the merger will allow members to receive “enhanced and expanded services that the modest size of our credit union is unable to provide.”
It said there are no plans for a capital distribution or to make any payments to members of the board or management as a result of the merger.
CMUFCU showed $19,906 in net income for the first two quarters of this year, with capital of 10.32%. GPFCU posted $250,460 in net income, with capital of 10.71% as of mid-year.
In Ohio, Small CU Says It Has Found a Better Widget
Merging Credit Union: Lake Erie Community FCU, Girard Penn.
Assets: $6.7 million
Members: 1,263
Year Founded: 1948
Date of Member Vote: Sept. 22
Acquiring Credit Union: Widget FCU, Erie, Penn.
Assets: $427 million
Members:44,316
Lake Erie Community FCU said the merger will allow it to “create a credit union with greater service capacity, as well as immediate access to additional services and seven additional locations.
The credit union said it will not distribute any portion to its members, and that current CEO Kris Ruffin will be retiring after 32 years with the credit union and will receive a retirement separation agreement of $35,000.
LECFCU reported a net loss of $35 for the first half of the year, with capital of 6.38%. Widget FCU had $1.099 million in net income and capital of 8.97% as of June 30.
Special Divided to Be Paid Out Ahead of Merger Vote
Merging Credit Union: Memorial Health Credit Union, Savannah, Ga.
Assets: $22.9 million
Members: 2,821
Year Founded: 1972
Date of Member Vote: Sept. 28
Acquiring Credit Union: CORE Credit Union, Statesboro, Ga.
Assets: $131.4 million
Members: 12,831
In its statement to members, Memorial Health CU’s board said it believes it needs to merge because “regulatory and other operating costs continue to rise. This partnership will greatly enhance our ability to survive in today's environment. In addition, we will be able to improve and increase the services offered to our members.”
It also cited access to shared branches, a call center, better pricing, improved cybersecurity, onsite financial literacy resources and more as reasons to merge.
Although the member vote isn’t until late September, MHCU said it paid out a special dividend of approximately 11.50% of its equity on June 30, with members receiving a bonus dividend at the rate of 2% of aggregate account balances.
Memorial Health did not indicate there would be any special distribution to the board or members of management as a result of the merger.
MHCU reported $21,789 in net income through June 30, with capital at 15.10%. CORE CU reported $196,981 in net income, with capital at 9.59%.
White Crown to Pay Out $500K to Members if Merger OK’d
Merging Credit Union: White Crown FCU, Denver
Assets: $68.4 million
Members: 4,822
Year Founded: 1951
Date of Member Vote: Sept. 30
Acquiring Credit Union: Colorado Credit Union, Littleton, Colo.
Assets: $310 million
Members: 21,264
White Crown CU’s board told members the merger is in their best interests because it will provide them with three full-service branches, in addition to new products and services, state of the art online and mobile banking, business accounts, mortgages and more.
White Crown CU said it does plan to distribute $500,000 in the form of a special dividend to members based on their deposits. It did not indicate any plans for any merger-related payment to board or management members.
White Crown reported a loss of $131,742 as of June 30, with capital of 9.55%. Colorado CU reported $1.231 million in net income over the same period, with capital of 9.64%.
CU Says No Distribution Can be Paid Due to Payments to 3 Staffers
Merging Credit Union: Norwich Telops FCU, Norwich, N.Y.
Assets: $11.4 million
Members: 1,211
Year Founded: 1968
Date of Member Vote: Oct. 8.
Acquiring Credit Union: GHS FCU, Binghamton, N.Y.
Assets: $218.3 million
Members: 18,209
Norwich Telops told members the merger will provide them with additional account and loan options not currently available, along with longer hours, commercial loans, drive-up service and more.
The credit union said it would not be distributing any of its net worth because it would reduce its “transferring net worth below 7% due to the distribution of $300,000 to credit union employees as a result of the merger.”
To that end, Norwich Telops said it plans to pay retirement bonuses of $100,000 each to Manager Sheryl Harmon, Assistant Manager Joanne Parkhurst, and Loan Officer Sharon Perry.
Norwich Telops reported net income of $4,241 for the year’s first half, with capital of 9.30%. GHS FCU posted $1.014 million in net income with 8.09% in capital as of June 30.
A ‘Consolidation of Energies’ Cited in Connecticut Merger Proposal
Merging Credit Union: Tri-Town Teachers FCU, Westport, Conn.
Assets: $27.9 million
Members: 1,870
Year Founded: 1955
Date of Member Vote: Oct. 20.
Acquiring Credit Union: Sound FCU, Stamford, Conn.
Assets: $85.4 million
Members: 6,190
In its statement to members, Tri-Town Teachers said the merger “allows for a consolidation of energies and resources of the two credit unions to better serve members in a competitive environment. Additional products will include in-branch cash services, money market accounts, a more robust home loan product suite, small business accounts and loans, a full service extended hours call center, and enhanced home banking and bill payment services.”
Moreover, it said it will be able to offer higher rates on savings and lower rates on loans, as well as an additional branch location.
As part of the merger three members of TTTFCU’s board will serve on Sound FCU’s board or its emeritus committee, and two members of TTFCU’s current supervisory committee will have the opportunity to serve in a similar capacity at Sound FCU.
Shaun Mee, president of Tri-Town Teachers, will become executive VP at Sound FCU. Mee will receive a compensation increase of as much as $25,550 annually as a result of the merger, the credit union said.
TTTFCU said there are no plans for a net worth distribution due to costs associated with the merger and because Sound FCU’s “extensive infrastructure and beneficial services and product offerings” that will be available after the merger.
Tri-Town Teachers reported a first half loss of $13,487, with capital of 7.46%. Sound FCU posted net income of $22,643 as of June 30, with capital of 8.82%.
Earlier Reports
CUToday.info reports on all mergers. Links to earlier reports during 2022 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
https://www.cutoday.info/Fresh-Today/Here-s-What-Latest-Disclosure-Forms-on-Proposed-CU-Mergers-Reveal
June 28
August 10
August 11