MONTPELIER, Vt.—Over the strong and public objections of its former CEO and four former board chairs, and by a narrow margin, members of Vermont State Employees CU have voted in favor of merging with Williston, Vt.-based New England FCU, which will create a $3-billion institution when completed.
According to several media reports, the vote attracted considerably more interest than most CU mergers, with 7,622 members voting in favor vs. 7,304 against the combination.
Plans for the merger were announced in February of this year, with NCUA signing off on the deal in August.
Although the merged credit union is effective Jan. 1, 2023, “uniting the two credit unions will be a gradual process over several months and a new name will be created and announced later in 2023 for the merged credit union,” the credit unions said in a statement.
“Our membership is highly engaged in the democratic process as member-owners evidenced by the highest credit union voter turnout ever in our history,” said Robert Miller, CEO of the $1.097-billion VSECU, who will serve as president and COO of the merged institution. “As we look toward the future, we are excited about the opportunity this partnership promises and ready to take VSECU into our united future for all of our members.”
Added John J. Dwyer, CEO of the $1.943-billion New England FCU, who will serve as CEO of the combined CU, “Our ability to bring two, like-minded, Vermont credit unions together will create tremendous opportunities, not only for our members, but employees and communities we serve.”
VSECU to Become a ‘Division’
The two credit unions will continue to operate separately as VSECU and NEFCU until Jan. 1, 2023. On that date, VSECU will become a division of New England Federal Credit Union. No changes will occur for members of either credit union while integration of systems, services, and products occurs, the credit unions said, adding “there is no firm deadline for the conclusion of the integration; it is expected that the combined credit union will operate as one entity later in 2023.”
The two credit unions, which will serve approximately 165,000 members when combined, said a rebranding process will be conducted to create a name and brand identity for the merged credit union. Dwyer stated that “The new entity is truly greater than the sum of its parts, calling for a dynamic name and brand that are relevant, descriptive, and evocative,” the credit unions said.
The merged entity will be Vermont’s largest credit union with 460 employees and 17 local branches, and $3 billion in assets.
As of Sept. 30, Vermont State Employees reported net income of $4.523 million, with net worth of 9.22%. NEFCU reported $7.6 million in net income with net worth of 12.30% as of the same date.
Opposition from Former CEO, Board Members
As CUToday.info reported here, after the merger plans were announced VSECUs former CEO, Steven D. Post, and four former board chairs formed a group called “Calling All Members,” and announced their opposition to the deal, including creating a website expressing their views.
One of the opponents of the merger, former board chair and former Vermont attorney general Jerry Diamond, told VTDigger.com, “It’s terribly disappointing. The vision of VSECU was to support primarily those areas of the state that were desperate to develop their economic engines but maintained their senses of community. That vision is gone.”