PITTSBURGH–In part II of this newest installment, CUToday.info’s industry-leading and ongoing updates on mergers in credit unions finds one merging CU with double the net income of the acquiring CU, two CUs representing $105 million in total assets merging into the same CU (and using the same language in their messages to members), and one CU with approximately $4,400 in capital per member saying there will be no net worth distribution as part of its planned merger.
In all, some 13 CUs are profiled in this latest overview of credit union mergers and what members are being told, including CUs citing sponsorship closings and the usual lack of any succession planning for retiring managers and board members.
Below is part two of a two-part series. Part one can be found here.
Lack of Volunteers, Difficulty Finding Staff is Cited
Merging Credit Union: Allegheny Health Services Employees FCU, Pittsburgh
Assets: $15.49 million
Members: 3,236
Year Chartered: 1973
Date of Member Vote: Oct. 25
Acquiring Credit Union: OMEGA FCU, Wexford, Penn.
Assets:$143.2 million
Members: 13,242
Allegheny Health Services EFCU told its membership the proposed combination will increase “stability in the current economy and current interest rate environment.” It further said it needs to merge due to a lack of volunteers and “hiring challenges in acquiring suitable replacements for retiring employees.”
“Years of limited growth has created the lack of resources and ability to invest in and offer the latest in technological offerings and additional office locations, enable online banking and expand the free use of a large network of ATMs, along with offering more products and services,” AHSEFCU told members.
Allegheny Health Services EFCU had $34,028 in net income at the end of June, to go with capital of 8.15%.
OMEGA FCU reported mid-year net income of 738,946 and capital of 9.59%.
Membership is Aging & Shrinking, Says WAFCU
Merging Credit Union: Wyoming Area FCU, Wyoming, Penn.
Assets: $9.42 million
Members: 405
Year Chartered: 1973
Date of Member Vote: Oct. 30
Acquiring Credit Union: W-BEE FCU, Wilkes Barre, Penn.
Assets: $43.6 million
Members: 1,354
‘With an aging membership and industry competition, we find ourselves shrinking in membership count due to our closed field of membership,” Wyoming Area FCU told members. “Loan demand is limited. Adding new services has been cost-prohibitive due to our size. Since we already share office space, a data processing system, and staff with W-BEE FCU, this merger will enable Wyoming Area FCU members to retain the efficient, personal service on which we pride ourselves.”
WAFCU reported a $7,765 loss at mid-year with capital at 8.34%. W-BEE FCU had $120,530 in net income and capital of 8.30% as of the same date.
‘Overwhelming Challenges’ Cited; Distribution Planned
Merging Credit Union: Kamehameha FCU, Honolulu
Assets: $41 million
Members: 3,594
Year Chartered: 1957
Date of Member Vote: Nov. 4
Acquiring Credit Union: Hawaiian Financial FCU, Honolulu
Assets: $953.7 million
Members: 54,037
Kamehameha FCU told its members it needs to merge due to the “overwhelming challenges to continued operations of inadequate staffing, regulatory burdens and increased competition.” Moreover, it said the merger will provide members with more products and services and greater access with more branches and other channels.
KFCU said if the merger is approved it will pay out a special dividend of approximately $170,000, equal to about 0.7985% of regular share balances.
Kamehameha FCU had $9,765 in net income through the midpoint of 2023, with capital of 12.22%. Hawaiian Financial had $2.64 million in net income and capital of 11.97% as of the same date.
35% Capital, But No Distribution Planned
Merging Credit Union: Port Washington Teachers FCU, Port Washington, N.Y.
Assets:$10.09 million
Members: 787
Year Chartered: 1950
Date of Member Vote:
Acquiring Credit Union: Port Washington FCU, Port Washington, N.Y.
Assets: $56.1 million
Members: 2,466
Port Washington Teachers’ board said the lesson plan is simple: the merger will offer members more products, services and “competitive rates.” It also said the two CUs share the same values.
PWTFCU posted a $18,622 red number as of the end of Q2, with capital of 35.16%, which is approximately $4,400 per members. It indicated no plan to return any of the net worth to members, saying they will benefit from the expanded product/service offerings.
Port Washington FCU had $376,472 in net income and robust capital of its own at 15.47% as of June 30.
Leaving Just One in Kankakee
Merging Credit Union: Kankakee Terminal Belt CU, Kankakee, Ill.
Assets: $7.115 million
Members: 1,180
Year Chartered: 1953
Date of Member Vote: Nov. 1
Acquiring Credit Union: Credit Union 1, Rantoul, Ill.
Assets: $1.57 billion
Members: 102,031
One of two CUs (along with Midwest Carpenters & Millwrights CU) seeking to merge into Credit Union 1, the board of Kankakee Terminal Belt CU told
members the merger is desirable because Credit Union 1 “operates the technology and systems that align with our members’ needs. Their internal core values give us confidence our membership will experience a much-needed upgrade in quality of service that we are unable to provide in this current economic environment.”
KTBCU said there would be no payout of any capital related to the merger because “we feel it is unnecessary given the members of Kankakee Terminal Belt Credit Union will have a host of updated services with Credit Union 1 that we are unable to provide in this current economic environment.”
KTBCU said its employees will be offered employment with Credit Union 1.
Kankakee Terminal Belt CU had $28,431 in net income through Q2, with capital at 9.06%. Credit Union 1 had $8.34 million in net income, with capital at 9.62% as of midyear.
Kankakee Terminal Belt, by the way, is one of 12 credit unions in the NCUA database that have or had the name of the Illinois city in their own names. Should the merger be approved, there will be just one left, Kankakee Federation of Teachers.
Looking to Become (Credit Union) 1 2.0
Merging Credit Union: Midwest Carpenters & Millwrights FCU, Hobart, Ill.
Assets: $97.3 million
Members: 17,155
Year Chartered: 1960
Date of Member Vote: Nov. 4
Acquiring Credit Union: Credit Union 1, Rantoul, Ill.
Assets: $1.57 billion
Members: 102,031
One of two CUs (along with Kankakee Terminal Belt CU) seeking to merge into Credit Union 1, Midwest Carpenters & Millwrights used the very same language in its message to members as was used by Kankakee Terminal Belt in listing its reasons for needing to merge, again saying Credit Union 1 “operates the technology and systems that align with our members’ needs. Their internal core values give us confidence our membership will experience a much-needed upgrade in quality of service that we are unable to provide in this current economic environment.”
Midwest Carpenters and Millwrights had $162,280 in net income at midyear, with capital at 6.75%. Credit Union 1 had $8.34 million in net income, with capital at 9.62% as of the same date.
For additional information on other CUToday.info reports on mergers in credit unions, go here: January 20, Feb. 8, Feb. 9, March 20, June 20, June 22.
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