GARDEN CITY, Ga.–In part II of this latest three-part review by CUToday.info of what members are being told about the newest CU mergers that have been proposed, in addition to the typical reasons being cited—such as “improved products and services”—this report finds CUs citing capital constraints, another with 32% net worth saying it can’t compete, a CU paying flat share distributions regardless of account balances, members confused over what the name of the merged CU will be, and much more.
In all, CUToday.info’s latest update on merger applications filed with NCUA finds 24 such proposed CU combinations, which will be reported in three parts this week. Part 1 can be found here.
Here is part two:
$150 Share Distribution Planned if Merger is OK’d
Merging Credit Union: G.P.A. Credit Union, Garden City, Ga.
Assets: $15.68 million
Members: 1,639
Date Chartered: 1952
Member Vote: Nov. 29
Acquiring Credit Union: Georgia Heritage FCU, Savannah
Assets: $126.8 million
Members: 13,641
Chartered to serve the Georgia Ports Authority, G.P.A. CU’s board told members the merger will produce additional economies of scale that will increase financial strength and stability, offer enhanced product and service lines, and offer additional branch locations.
The credit union said if the merger is approved it will offer a share distribution of $150 per member.
It said its main office will remain open for a limited time as a branch of Georgia Heritage, and will then close, but an ATM/ITM on the Georgia Ports Authority premises will be installed following the merger.
G.P.A. CU had a $33,902 loss over the first nine months of this year, with capital at 16.75%. Georgia Heritage had $428,802 in net income and 11% capital as of Sept. 30.
5 Members File Comment, With Some Confusion Seen
Merging Credit Union: Northpark Community CU, Lebanon, Ind.
Assets: $42.8 million
Members: 4,704
Date Chartered: 1933
Member Vote: Dec. 4
Acquiring Credit Union: Centra Credit Union, Columbus, Ind.
Assets: $2.060 billion
Members: 157,373
Northpark Community cited numerous factors for the reasons it needs to merge, saying members will benefit from greater products and services, scale and impact, a larger branch, ATM and ITM network, a new member loyalty rewards program and expanded community involvement.
NCCU said its president, Carma Parrish, will remain in a leadership role.
Northpark Community CU was featured in CUToday.info here in 2021 when it closed its branches and went virtual as a means of driving profitability and growth.
Some Confusion Over Name
Five comments were filed by members in response to the merger, four of whom opposed the combination and two of whom were members of Centra CU.
NCUA merger disclosure forms officially list the acquiring CU as the “continuing credit union,” which led one member to write, “I don’t care about the merger, but I do care about the changing of the name of Centra Credit Union to ‘Continuing Credit Union.’ What an absurd name!! I have been a member of Centra for many years and I wish for the name to remain the same.”
Added another member, “There seems to be no apparent benefits for current Centra CU members. The only ones who could benefit from the absorbing the much smaller CU would seem to be the Centra Credit Union Senior Executives, who will get larger salaries and bonuses [and maybe bragging rights?]”
Through Sept. 30 Northpark Community reported a loss of $3,007, 985, with capital of 10.06%. Centra Credit Union posted net income of $7.3 million and net worth of 12.49% as of the same date.
It’s ‘Hard to Compete’ Says 1 Small CU With 32% Capital (& No Plans for Distribution)
Merging Credit Union: Muskegon Patternmakers FCU, Muskegon Heights, Mich.
Assets: $2.71 million
Members: 384
Date Chartered: 1956
Member Vote: Dec. 7
Acquiring Credit Union: Service 1 FCU, Norton Shores, Mich.
Assets: $193.7 million
Members: 21,756
Muskegon Patternmakers said it is finding it “hard to compete” in today’s highly regulated, high-tech environment. The costs of technology and regulations have made it difficult for the credit union to provide its members with all of the products and services a larger credit union can provide.”
MPFCU lost $11,185 through Sept. 30, with capital standing at 32.36%. It said there will be no distribution to members. Service 1 had $1.64 million in net income and capital of 15.49% as of the same date.
'Capital Constraints’ Limiting Options, A VA CU Says
Merging Credit Union: Hampton VA FCU, Hampton, Va.
Assets: $5.98 million
Members: 1,101
Date Chartered: 1936
Member Vote: Dec. 12
Acquiring Credit Union: Healthcare Systems FCU, Falls Church, Va.
Assets: $129.6 million
Members: 12,712
While it has remained true to its core of serving healthcare workers, Hampton VA FCU told members capital constraints have now allowed it to expand beyond basic savings and services.
“Not having the capacity to meet demand for online services, expanded credit product offerings and other financial services has limited the credit union’s ability to grow and is eroding its membership base,” HVAFCU said, also noting the regulatory burden on the CU.
HVAFCU said its office will remain open post-merger, and members will have access to six other HSFCU branches.
Hampton VA FCU reported an $8,809 loss and net worth of 5.89%. Healthcare Systems FCU had $836,949 in net income and capital of 10.31% as of the same date.
‘Undeniable Opportunities’ Are Cited
Merging Credit Union: Greenbelt FCU, Greenbelt, Md.
Assets: $37.6 million
Members: 2,525
Date Chartered: 1937
Member Vote: Dec. 13
Acquiring Credit Union: Prince George’s Community FCU, Bowie, Md.
Assets: $249.1 million
Members: 17,120
Greenbelt FCU’s board said that while it is “financially strong,” the merger would create “undeniable” opportunities and efficiencies, and would offer three more branches (its current branch will remain open), better service, expanded/improved products and services, improved technology, better rates and more opportunities for employee growth.
As of Sept. 30, Greenbelt FCU posted $468,879 in net income, with capital of 10.52%, while Prince George’s Community FCU had $3.067 million in net income and 12.90% in capital.
Ohio CU Looks to Cross a Bridge to Merge
Merging Credit Union: YS Federal Credit Union, Yellow Springs, Ohio
Assets: $23.8 million
Members: 1,910
Date Chartered: 1948
Member Vote: Dec. 14
Acquiring Credit Union: Bridge Credit Union, Powell, Ohio
Assets: $197.2 million
Members: 20,631
In telling its members why it needs to merge, the board of YS FCU cited expansion to 10 branches, access to surcharge-free ATMs, a membership rewards program, staffing support for operational challenges (it said member calls, back-end services and lending will be centralized, allowing employees to focus on member service), staff opportunities, financial strength, community investment and business lending as the positives (unlike many CUs’ merger disclosure forms, YSFCU listed all of the services it will provide post-merger).
Yellow Springs posted $64,110 in net income through the first nine months of 2023, to go with a 9.76 capital ratio. Bridge CU reported $1.14 million in net income and net worth of 10.87 as of the same date.
First of 2 CUs With ‘Chippewa County’ in Name Looking to Merge
Merging Credit Union: Chippewa County CU, Sault Sainte Marie, Mich.
Assets: $38.1 million
Members: 3,235
Date Chartered: 1955
Member Vote: Dec. 18
Acquiring Credit Union: U.P. State Credit Union, Escanaba, Mich.
Assets: $139.2 million
Members: 10,846
Chippewa County CU is one of two credit unions proposing to merge into U.P. State Employees CU (see below).
After saying the merger will provide expanded products and services and more access, Chippewa County CU told members, “over the years, Chippewa County Credit Union has been unable to invest in services today's member requires, and as a result membership has declined. The inability to grow loans is problematic in our current rate environment, following the COVID pandemic. Investing existing funds will no longer yield enough to cover current and future expenses.”
One person will receive merger-related compensation, CCCU said: COO Brad Bisdorf will see an increase of $12,958 annually.
CCCU had $245,695 in net income and capital of 10.92 as of its Q3 call report. U.P. State Credit Union had $1.51 million in net income and 9.82 as of Sept. 30.
CCCU Second of 2 CUs Seeking to Move on U.P.
Merging Credit Union: Federal Employees of Chippewa County Credit Union, Sault Sainte Marie, Mich.
Assets: $17.1 million
Members: 1,334
Date Chartered: 1957
Member Vote: Dec. 18
Acquiring Credit Union: U.P. State Credit Union, Escanaba, Mich.
Assets: $139.2 million
Members: 10,846
The second of two CUs seeking to merge into U.P. State CU, Chippewa County CU used the exact same language as that used by Chippewa County CU in its disclosure form to members in explaining why it needs to merge (see above).
Federal Employees of Chippewa County CU had $266,303 in net income and 9.89%, while U.P. State Credit Union had $1.51 million in net income and 9.82% as of Sept. 30.
Earlier Reports
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, Sept. 12, Sept. 13, Nov. 14.
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