ALEXANDRIA, Va.–The first review of 2023 of credit unions seeking to merge has found some new developments as well as some old reasons being cited when it comes to telling members why a combination would be in their best interests.
The newest review by CUToday.info of the member disclosure forms credit unions must provide to members ahead of a proposed merger has found:
- Some credit union that will continue to operate as “divisions” of the acquiring CU
- Two CUs that share a CEO are merging into another
- Several tiny CUs that are disappearing (one reported a loss of less than $250)
- One CEO getting merger-related compensation
- Just one CU paying out any of its net worth.
Here’s a look at what the disclosure forms show:
Inability to Find New Board Members Among Reasons Cited
Merging Credit Union: Novamont Employees FCU, Kenova, W.V.
Assets: $1.2 million
Members: 109
Date Chartered: 1977
Date of Member Vote: Feb. 27
Acquiring Credit Union: First Priority FCU, Barboursville, W.V.
Assets: $70.9 million
Members: 7,130
In its statement to members, Novamont EFCU said, “First Priority FCU is able to provide more products and services, such as mortgages, credit cards, checking accounts and other online services that Novamont Employees FCU cannot provide to members. Novamont Employees FCU current board members have served for the last five years and cannot find members willing to take the place of current board members. Novamont Employees FCU’s main office is located inside of an industrial plant and does not have the ability to keep up with the changing technologies.”
NEFCU said there would be no merger-related compensation paid to management as everyone is “unpaid.” It also said it will not distribute any of its net worth of 15.50%.
Novamont Employees reported $3,825 in net income through Sept. 30, 2022. Although nearly 70 times larger, First Priority reported similar net income, posting $5,019, through the same date, with capital of 9.44%.
Tiny CU Seeks a Big Move Up
Merging Credit Union: Faith Tabernacle Baptist FCU, Stamford, Conn.
Assets: $98,848
Members: 150
Date Chartered: 1956
Date of Member Vote: Feb. 28
Acquiring Credit Union: SOUND FCU, Stamford, Conn.
Assets: $86.7 million
Members: 6,129
Faith Tabernacle Baptist said its board concluded the merger was in members’ best interests because “it allows for consolidation of energies and resources of the two credit unions to better serve members in a competitive and secure environment.” The CU also cited additional products, enhanced convenience (including three branches and home banking) and “leadership representation,” which it said will “transfer to Edward Fox, president/CEO, of the continuing credit union who will be actively involved with the credit union’s day-to-day operations.”
FTBFCU, which cited the “shared values” of Sound FCU, said its main office would close with the merger.
Faith Tabernacle reported a $231 loss as of Sept. 30, 2022, with capital of 12.94%. Sound FCU posted net income of $160,384 and net worth of 8.84% as of the same date.
More Equality Sought in the Equality State
Merging Credit Union: Reliant FCU, Casper, Wyo.
Assets: $191 million
Members: 13,741
Date Chartered: 1936
Date of Member Vote: March 7
Acquiring Credit Union: UniWyo FCU, Laramie, Wyo.
Assets: $525.6 million
Members: 36,582
The merger will provide “better pricing and services, additional products, enhanced convenience and account access, additional opportunities for Reliant employees, and lower operating costs. The merged credit union will also achieve economies of scale which will permit it to better compete in the increasingly competitive financial services industry,” the credit union told members.
Reliant, which said all of its branch locations will remain open (the two CUs are 152 miles apart), said there will be no share distribution.
Reliant FCU reported $600,893 in net income through Sept. 30, 2022, with capital of 8.76%. UniWyo FCU posted $3.691 million in net income with net worth of 9.80%.
A ‘Good Idea,’ Plus a Drive-Through Are Cited
Merging Credit Union: Muni-Employees Credit Union, Ottumwa, Iowa
Assets: $658,662
Members: 227
Date Chartered: 1952
Date of Member Vote: Feb. 16
Acquiring Credit Union: River Community CU, Ottumwa, Iowa
Assets: $25.1 million
Members: 3,642
Muni-Employees CU was brief in describing why its board felt a merger with RCCU was a good idea. “River Community Credit Union has more loan, share and certificate options. They are open Monday-Friday, (offer) online banking and has a drive-up window,” MECU said in its disclosure statement.
MEFCU, which said it will close its office on Feb. 17, said it is not distributing any net worth but would be paying a higher interest rates on share balances “at the end of 2022.”
Muni-Employees reported a loss of $272 as of Sept. 30, 2022, with capital of 11.30%. River Community CU reported $56,042 in net income and net worth of 13.48% as of the same date.
Acquired CU to Operate as ‘Division’ if Merger OK’d
Merging Credit Union: Stamford Postal Credit Union, Stamford, Conn.
Assets: $13.1 million
Members: 1,947
Date Chartered: 1949
Date of Member Vote: Feb. 17
Acquiring Credit Union: America’s First Network Credit Union, East Hartford, Conn.
Assets: $62.7 million
Members: 5,698
The board of SPCU told the membership the merger is desirable because it will:
- Maintain brand awareness as the CU will operate as Stamford Postal Credit Union, a Division of America’s First network Credit Union
- Will provide additional services such as credit cards, first mortgages, HELOCs, MMAs, and mobile banking
- Will offer additional branches while maintaining current branch
- Will offer competitive rates
- Will offer continued personalized services
- Will reduce operating expenses that will allow for additional investments in new products/services and future member growth
Unlike most merger disclosure forms provided by credit unions, Stamford Postal included a chart showing how its net worth compares to that of America’s First Network Credit Union. With net worth of 24.45%, compared to 8.32% at the acquiring CU, SPCU said it will distribute a portion of its net worth by paying out a $200,000 special dividend to those who have been members for a minimum of three years and who are in good standing.
Stamford Postal reported a loss of $17,244 through the first three quarters of 2022. America’s First Network CU reported $391,172 in net income and capital of 8.32% as of Sept. 30, 2022.
Prayer’s To/From St. Anthony to be Answered by Merger
Merging Credit Union: St. Anthony of New Bedford FCU, New Bedford, Mass.
Assets: $12.17 million
Members: 1,162
Date Chartered: 1942
Date of Member Vote: Feb. 26
Acquiring Credit Union: SouthCoast FCU, New Bedford, Mass.
Assets: $58.1 million
Members: 4,051
“Despite a recent increase in members, St. Anthony’s FCU’s financial position has continued to degrade,” the credit union said its statement to members. “Following an assessment of financial projections and loan attrition, the board made the decision to merge with a partner who could provide stability for members into the future.”
St. Anthony’s board told members SouthCoast FCU will be able to provide enhanced digital delivery, a broader range of products, additional branch locations and bilingual services.
St. Anthony’s FCU reported a net loss of $40,568 through the first nine months of 2022, with capital of 6.44%. SouthCoast FCU posted $363,901 in net income and capital of 10.27%.
Two CUs That Share CEO Seeking to Merge Into Another; Execs to Get Payments
Merging Credit Union: Printing Industries Credit Union, Riverside, Calif.
Assets: $30 million
Members: 3,781
Date Chartered: 1957
Date of Member Vote: March 14
Acquiring Credit Union: Credit Union of Southern California, Anaheim
Assets: $2.38 billion
Members: 133,085
In a unique scenario, two credit unions that are headed by the same person are seeking to merge into Credit Union of Southern California.
Members of Printing Industries Credit Union and Pacific Transportation FCU are both being asked to vote in favor of the combination. A disclosure form for Pacific Transportation FCU has not been filed with NCUA.
Printing Industries said it needs to merge to allow for a “consolidation of energies and resources of the two credit unions to better serve the members in a competitive and secure environment.”
The merger will also bring to members expanded products and services, PICU said, including financial education, Apple Pay, Zelle, expanded loan offerings, wealth management, and “robust” online platforms.
PICU said an advisory committee made up of its current board to assist with “post-merger integration,” and that its current CEO, Susan Conjurski, will become VP-strategic services in the merged institution.
Printing Industries CU said its name would continue to appear on branch locations and on some communication channels for at least two years.
There will be no distribution of net worth, PICU reported.
Benefits to CU Execs
According to the disclosure form, Conjurski will receive a one-time retention bonus of $14,000 if she remains with the merged CU for at least six months after the integration of the IT systems. PICU said Conjurski does not have a supplemental retirement plan with either credit union, but to reward her “meritorious service” she will receive a Supplemental Executive Retirement Plan (SERP) with a maximum of $300,000 if she remains with CU of Southern California for five years.
Conjurski will also receive a SERP as part of the merger of Pacific Transportation FCU with a maximum benefit of $700,000 after five years of employment with CU SoCal (or less if she voluntarily exits).
The total max potential amount Conjurski would be eligible to receive related to the PICU merger represents $885 for each month she has been with the credit union (17 years), the disclosure forms state.
Brenda Huesterberg, VP-administration with PICU, would receive a retention bonus of $10,000, severance of $7,000 if she voluntarily leaves within two months of the merger, and $1,138 in accrued sick leave.
PICU indicated there will be no payout of net worth to members. Printing Industries CU reported net income of $190,216 through Sept. 30, 2022, with capital of 10.16%. Credit Union of Southern California had $17.73 million in net income and capital of 11.45%.
Merger Just the Rx for Inability to Grow, Says PCCU
Merging Credit Union: Prime Care Incorporated CU, Norfolk, Va.
Assets: $26.1 million
Members: 3,950
Date Chartered:1970
Date of Member Vote: March 15
Acquiring Credit Union: Healthcare Systems FCU, Falls Church, Va.
Assets: $109.1 million
Members: 9,247
Prime Care CU told its members it needs to merge because capital constraints have not allowed it to expand its services beyond basic savings and loan offerings. Not having the ability to offer electronic channels to members have limited its ability to grow, adding that regulatory burden is also an issue. PCCU added that members will also have expanded branch access as a result of the merger.
Prime Care also noted the similarity in the CUs’ FOM as another reason the merger is a good idea.
PCCU reported a loss of $82,914 for the first three quarters of 2022, with capital of 10.75%. Healthcare Systems FCU posted $566,943 and capital of 8.70%.
Other Merger Reports
CUToday.info’s earlier comprehensive reports on CU mergers can be found at these links:
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
Oct. 26
https://www.cutoday.info/Fresh-Today/CU-Merger-Update-Part-III-Struggling-Sponsors-Sunnier-Skies-Exec-Payouts-More
Nov. 17
https://www.cutoday.info/Fresh-Today/Among-10-Latest-CUs-to-Announce-Merger-Plans-a-Common-Theme
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