GARDEN CITY, N.Y.–Members of the $278-million Sperry Associates FCU are being asked to vote on a merger into the $26-billion Pentagon FCU (PenFed) in McClean, Va.
In proposing the merger to members, Sperry Associates FCU Chairman Gary Barello said the deal will provide members with access to a wider range of products and services in branches and online. All eligible members will also receive a $350 special merger dividend totaling about $5.7 million if the transaction is approved, according to the credit union.
The notice to Sperry Associates members said that because of a changing financial services marketplace on Long Island, including the presence of big banks and fintechs, it has “become more challenging for mid-sized institutions like Sperry to thrive. While Sperry is currently financially healthy and well-capitalized, our board of directors felt that partnering with PenFed is the best option to ensure that our membership gets the service they both expect and deserve — all while continuing the credit union mission of people helping people,” BankingDive.com reported.
Barello said PenFed was selected as a merger partner because both institutions have roots in the defense sector and PenFed “offered the most comprehensive benefits to our membership and employees,” according to the report.
BankingDive.com reported all SAFCU staffers who are not offered a position at PenFed will receive one year’s worth of pay as a severance package. Several members of the executive team have been given two- to five-year guarantees of employment at PenFed, the report added.
A special member meeting to announce the results of the vote will be held Sept. 30. If approved, the deal is expected to close by the end of this year.