ALEXANDRIA, Va.–New disclosure forms filed with NCUA show three more credit union mergers have been proposed.
In all three disclosure forms filed with the agency similar language was used for the reasons for the merger, primarily an inability to compete due to asset size, while in one of the mergers’ plans call for compensation to be paid to management as a result of the combination that is nearly three times larger than the proposed payout to members.
Announcing plans to have members vote on mergers were:
NMA FCU into Pentagon FCU
Merging Credit Union: NMA FCU, Virginia Beach, Va.
Assets: $64.5 million
Members: 7,835
Net Income: ($220,275)
Net Worth: 5.43%
Continuing Credit Union: Pentagon FCU, McClean, Va.
Assets: $27.6 billion
Members: 2.34 million
Reasons for Merger: “In today's landscape of digital transformation coupled with evolving technology, regulatory compliance, and increasing cyber criminal threats, our board of directors evaluated strategic possibilities to assure that you, our member, will continue to receive the full range of products and services you deserve…,” NMA Credit Union said in its disclosure form. “A merger with PenFed meets the full range of our objectives: growth of membership, expansion of product offerings, infusion of investment in IT cybersecurity, improved training, and enhanced community service.”
Merger-Related Net Worth Distribution: NMA said it plans to distribute approximately $100,000 to eligible members in good standing.
Merger-Related Board/Management Compensation:
- NMA said a 10% retention bonus, not to exceed $10,000, will be paid to each NMA employed at PenFed six months after the merger date.
- NMA said CEO Michael Coleman will be entitled to the following optional severance payment: If termination of employment by either party occurs within 12 months after the merger completion date, 24 months of his current annual salary; beginning on the 13th month of employment following the merger completion date and for each successive month, up to the 36th month of employment, one month of severance pay will be deducted from the total 24 month severance guarantee. Michael Coleman's annual salary is $142,000; Maximum payout if employment is terminated by either party would be $284,000.
Date of Member Vote: Dec. 8, 2021
Western Heritage FCU & Meridian Trust FCU
Merging Credit Union: Western Heritage FCU, Alliance, Neb.
Assets: $65.5 million
Members: 8,753
Net Income: $127,676
Net Worth: 8.80%
Continuing Credit Union: Meridian Trust FCU, Cheyenne, Wyo.
Assets: $569.7 million
Members: 31,640
Reasons for Merger: “The merger is in the best interests of members because western heritage has a passion to serve their existing and potential membership with local and digital service, centralized non-revenue generating responsibilities, develop (sic) current staffing and have additional mortgage and business products,” Western Heritage FCU said in its disclosure.
Merger-Related Net Worth Distribution: None
Merger-Related Compensation to Board/Management: None
Date of Member Vote: Dec. 15, 2021
G.H.S. FCU & South Carolina FCU
Merging Credit Union: G.H.S. FCU, Greenville, S.C.
Assets: $55.2 million
Members: 11,254
Net Income: $17,535
Net Worth: 8.55
Continuing Credit Union: South Carolina FCU, North Charleston, S.C.
Assets: $2.34 billion
Members: 169,394
Reason for Merger: “The merger is in the best interests of members because it will increase efficiency and operations of scale, provide greater access to branches and ATMs, while providing the membership with a wider array of products and services,” G.H.S. FCU said.
Merger-Related Net Worth Distribution: None. G.H.S. FCU said there would be no distribution...because the “probable asset to share ratio (the relative value of $1 of shares in the credit union) is the same at both credit unions.”
Merger-Related Board/Management Compensation: None indicated
Date of Member Vote: Dec. 8, 2021