ALEXANDRIA, Va.–In the second part of this two-part series examining the latest merger disclosure forms filed with NCUA, those seeking to combine with another credit union are listing the typical reasons for making the move, including crushing regulatory costs, as well as some unusual reasons, too.
As reported in the first part of this latest two-part series, not surprisingly, many of those looking to end their charters are small, but more surprising is that a number are merging into other CUs that are, relatively speaking, on the smaller side themselves. Only a few of the CUs merging announced their intention to return capital to members.
CUToday.info has been comprehensively reporting on every merger disclosure form filed with NCUA, which requires credit unions to inform members of the reasons they believe they need to merge, plans for any return of capital, whether any members of senior management or the board will receive merger-related compensation, how members can offer feedback on mergers, and when the vote will take place.
This publication’s most recent update on CU mergers in 2022 can be found here and here.
Other credit unions announcing merger plans include:
‘Xploring’ a New Option
Merging Credit Union: P.A.C.E. Kenner, Kenner, La.
Assets: $1.55 million
Members: 450
Acquiring Credit Union: Xplore FCU, Metairie, La.
Assets: $170.2 million
Members: 7,899
Date of Member Vote: June 22
P.A.C.E. Kenner told its members it needed to merge as the combination will provide them with more full-service products and services, as well as access to more branches, shared branches, and a surcharge-free ATM network.
The credit union said there will be no net worth distribution and that it’s one part-time employee, Sally Carroll, will be paid a severance of $4,000 at the time the merger is completed.
As of March 30, P.A.C.E. Kenner reported a loss of $6,923 for Q1, with capital of 12.13%. Xplore FCU posted net income of $193,841, with net worth of 9.36%.
Creating a Mega-CU in Capital Region
Merging Credit Union: Capital Communications FCU, Albany, N.Y.
Assets: $2.77 billion
Members: 156,609
Acquiring Credit Union: State Employees FCU, Albany, N.Y.
Assets: $5.587 billion
Members: 367,103
Date of Member Vote: June 22
In its communication to members, CAP COM stated, “Although CAP COM thrives today, there is no guarantee it will be immune to the ever-increasing competitive pressures that can blunt success in the future. Throughout the United States credit unions face immense challenges from digital-only banking services, industry disruptors, and powerful mega banks. This merger will increase operating efficiencies and offer the potential to expand products and services for credit union members sustainably over time. Joining forces with SEFCU is the ultimate collaboration.”
The CAP COM board chair said the merged institution, and CAP COM representatives will fill seven of the 15 seats on a newly expanded board, according to disclosure statements.
CAP COM said there will be no share adjustment or distribution. The credit union said its CEO, Chris McKenna, and EVP/CFO David Jurczynski, are covered by collateral-assigned split-dollar life insurance plans that will become 100% vested on the merger date.
CAP COM reported $7.134 million in Q1 net income, with capital of 9.86%.
Very Small CU Sees One Option
Merging Credit Union: Security Plus FCU, Russellville, Ky.
Assets: $578,260
Members: 132
Acquiring Credit Union: Service One CU, Bowling Green, Ky.
Assets: $223 million
Members: 14,934
Date of Member Vote: June 24
In its disclosure to members, which was a letter from CEO Rebecca Stone, more products and services were cited as the primary reason for the merger, including additional checking choices, links to other FIs, a vehicle search platform and more.
Despite a whopping 45.92% net worth ratio, the SPFCU letter did not state anything related to net worth distribution or merger-related compensation. Security Plus posted a loss of $34,433 for Q1.
Service One reported $271,590 in net income, with net worth of 9.71% as of the same date.
Merger is One CU’s Safe ‘Harbor’
Merging Credit Union: Harbor Beach Community FCU, Harbor Beach, Mich.
Assets: $4.5 million
Members: 623
Acquiring Credit Union: Flagship Community FCU, Port Huron, Mich.
Assets: $33.4 million
Members: 3,205
Date of Member Vote: June 26
In its statement to members, Harbor Beach Community CU cited additional products and services as the reason for the merger.
HBCFCU said it will not be distributing any of its 9.26% net worth as “retention of capital will help support ongoing operations.” The net worth of Flagship Community FCU was just 6.72% as of March 30.
It also said there will be no merger-related financial arrangements.
Harbor Beach Community FCU reported a first quarter loss of $5,476. Flagship Community posted net income of $28,117 for Q1.
One CU’s Final Lament
Merging Credit Union: Rochester Polish FCU, Rochester, N.Y.
Assets: $7.7 million
Members: 356
Acquiring Credit Union: Ever $ Green FCU, Rochester, N.Y.
Assets: $43.5 million
Members: 1,990
Date of Member Vote: June 26
This is the second merger announced this year by Ever $ Green FCU, which, as CUToday.info reported here, is also merging in the $23-million WIT FCU.
In its statement to members, Rochester Polish FCU said it is seeking to merge because, “Our credit union has found itself in a standstill over the past several years. Membership continues to decline due to an aging membership. We have been unable to increase our membership and we have been unable to increase our loan portfolio. New and younger members want electronic services, which we are unable to deliver because of the above. Additionally, we have been unable to find additional staff, and no qualified candidates seem to be forthcoming; our manager has been our only staff for the past 15 months.”
Rochester Polish FCU said it will distribute a portion of its 21.65% net worth to members in the form of a fixed percentage of each members’ 12-month average total deposit and loan account balances as of Dec. 31, 2021. The overall payout will be approximately $435,000 the CU said.
The merger, RPFCU told its members, will lead to more products and services, e-access to accounts and better rates.
There will be no merger-related compensation paid out.
Rochester Polish FCU reported $24,960 in net income in Q1. Although it is six times larger than RPFCU, Ever $ Green FCU reported $36,838 in net income over the same time period, with net worth of 9.41%.
Merger Will Include Combined Board
Merging Credit Union: Wanigas Credit Union, Saginaw, Mich.
Assets: $418.8 million
Members: 23,997
Acquiring Credit Union: Financial Plus CU, Flint, Mich.
Assets: $830.9 million
Members: 57,891
Date of Member Vote: June 28
In its statement to members, Wanigas CU said the merger will result in greater convenience via 11 total branches, better “member service,” expanded/improved products and services, improved technology, more competitive rates and more employee opportunities (it said all employees will be retained).
Wanigas said four members of its board will join a combined board with Financial Plus, with its chairman becoming vice chair of the merged CU. It said it will also form an Emeritus Advisory Board in which three members of its board will offer input to the combined board, without voting authority.
Plans call for the merger to be completed by Aug. 1 if approved by members.
Wanigas CU reported net income of $857,740 and net worth of 13.77% as of Q1. Its disclosure form indicated no plans for any net worth distribution or merger-related compensation to management or board. Financial Plus CU posted $2.031 million in net income and net worth of 10.82% as of the same date.
Yes, FOMO is Very Real in this Case!
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com