ADAMSVILLE, Tenn.–Citing both the usual—“expanded products and the services”–and the frequently heard—inability to keep up with “required regulations”–10 more credit unions have announced plans to merge, with only a few reporting a payout of net worth back to members and one saying four of its executives will receive bonuses as the result of the merger.
In this analysis, CUToday.info features the second half of those 10 CUs, with the first five reported on Jan. 31 (and also included below).
Worthy of note: Again, even in cases where capital was very high, only two of the 10 CUs reported plans to distribute any net worth back to members. One credit union did say it would be paying out merger-related compensation to four members of the management team, which is listed below.
Here’s a look at five of the latest merger announcements:
In Tennessee, Seeking Greater Resources
In Adamsville, Tenn., the $1.7-million McNairy County Employees Credit Union said it is seeking to merge with the $131-million Employee Resources CU, Lawrenceburg, Tenn., and has set a March 14 meeting for a vote on the issue.
In its statement to members, McNairy County ECU said the merger will provide its 569 members with “access to a wide variety of financial products and services.”
McNairy County reported $87,801 in net income for 2021, with net worth of 25.42%.
The credit union said it does not plan to distribute any of its net worth upon completion of the merger, that there will be no merger-related compensation paid out, and that its office on North Oak Street will remain open.
Employee Resources, which has approximately 19,000 members, reported $977,711 in net income and 8.51% net worth.
Louisiana: Struggling to Add Members, Deal With Hurricane
In Louisiana, members of the $3.47-million Texaco of Houma CU are being asked to vote on March 15 on a merger into the $600-million Pelican State Credit Union in Baton Rouge, which has nearly 70,000 members.
In its disclosure to members, Texaco of Houma CU said its board made the decision to merge to improve services and after concluding that given its size, its struggles in adding members and challenges to remain financially competitive, it is the best decision. It further cited challenges from COVID-19, operational challenges related to 2021’s Hurricane Ida, and a retiring manager as the reasons for seeking the merger.
THCU pointed to Pelican CU’s strengths, product offerings and desire to have an office in Houma, La. as among the reasons it was selected as a merger partner.
Texaco of Houma reported $22,198 in net income on its most recent call report, with net worth of 17.85%. Pelican State reported $10.1 million in net income and net worth of 10.35% as of year-end.
Texaco of Houma, which provided members with a copy of the consolidated financials of both credit unions, said it will not be distributing any net worth and indicated there will there be any merger-related compensation for anyone.
Wisconsin: A Payout for 4 Execs
In Wisconsin, the $26.5-million Schneider Community Credit Union in Green Bay said its members will vote on March 14 on a merger with the $2.4-billion Fox Communities Credit Union in Appleton, Wis. The meeting is to be held in the lobby of SCCU’s main office.
In a statement to its 3,175 members Schneider Community said, “the credit union continues to be financially strong; however, with the ever-increasing competitiveness in the financial world and the need to continue to provide you, our member, with great service, new products, competitive rates, and most importantly, ever-growing technology, we have decided that this can be best done by uniting with another credit union.”
SCCU stressed that all employees would be retained after the merger.
Schneider Community disclosed that a number of its employees will receive a retention bonus/supplemental retirement benefit based on years of service as a result of the merger, including: VP-Operations Noel Taetsch, $25,116; VP-Lending Matthew Monfils, $34,320; Senior Loan Officer Michele Garsow, $47,266, and President/CEO Dorrie Schrimpf, $173,250.
SCCU said there are no plans to distribute any net worth to members.
Schneider Community reported $23,471 in net income on year-end call report, with net worth of 12.51%. Fox Communities reported $18.3-million in net income with net worth of 10.33%.
Volunteer State: The End of Life (But a $1 Million Payout)
Also in Tennessee, the $41.8-million Nashville-based Life FCU is seeking to merge into the $716-million Fortera FCU in Clarksville. A March 10 date for a member vote has been set.
In its statement to members, Life CU said the merger will “greatly broaden the financial products and services available to members and further strengthens our commitment to helping you reach your financial goals.” It further cited expanded branches as a reason for the merger.
Life said its board has OK’d a $500 payment to nine Life employees “in recognition of their efforts in support of the merger.” In addition, it said “Fortera anticipates making incentive payments of $500 upon approval and $2,500 one year later for all current Life employees.”
Moreover, Life CU said it plans to pay out a capital distribution of $1 million to its 3,884 members, although its disclosure statement did not include a formula for the payout.
Life CU’s year-end call report shows it reported a net loss of $104,193 and capital of 9.02%. Fortera reported $4.972 million in net income and net worth of 13.03%.
In Minnesota, Out of Energy
In Mankato, Minn., the $7.4-million Northern Energy FCU said its members will vote at the Loose Moose on March 9 on a combination with the $247-million Minnesota Valley FCU.
In its statement to approximately 1,000 members NEFCU said it is merging because “we are no longer able to keep up with the required regulations, exams, and audits with our limited staff.” It also cited expanded online and mobile capabilities, more branches and other services as reasons for the merger.
Northern Energy reported $16,874 in net income for 2021, with net worth of 14.54%.
Northern Energy said it will not be distributing any of its net worth to members and that its main office will close effective March 31 if the merger is approved.
As of Sept. 30, 2021, Minnesota Valley reported $3 million in net income, with net worth of 10.16%.
Additional Mergers
As CUToday.info reported earlier, five other mergers are also planned, including:
Revere’s Last Ride
In Revere, Mass., the $18-million Revere Municipal Credit Union has announced a membership meeting on March 22 for a vote on a merger into St. Jean’s Credit Union.
RMCU said in its disclosure documents filed with NCUA that the merger will allow it to partner with a larger credit union to provide additional financial services to current and future members. It cited nearly a dozen product and services benefits members will gain as a result of the combination, including 12 additional surcharge-free ATMs.
“Both credit unions share the same organizational values and have assisted each other through the pandemic,” Revere Municipal said.
Revere Municipal, which has approximately 2,250 members, reported a loss of $21,614 as of Sept. 30, 2021, with net worth of 8.05%. The $321-million St. Jean’s, which is based in Lynn, Mass. and which has approximately 17,000 members, reported net income of $1.242 million and net worth of 8.39% as of the same date.
RMC said it will not distribute any of its net worth to members and that one of its two branches will close at the completion of the merger. It further said no member of management or the board will benefit from the merger.
Long-Time Manager Retiring in the Bluegrass
In Kentucky, the $12.6-million Hopkins County Teachers FCU in Madisonville is seeking to merge into the $70.1 million Owensboro FCU in Dallas, Ky., and has set a date of March 21 for a member vote.
In its notice to members, HCTFCU said it is seeking to merge “because it will give all members access to a full service credit union on the ground level, with drive through and ATM banking.” It also cited numerous other product offerings from which members will benefit.
In keeping with a point raised at last week’s NCUA board meeting, during which NCUA staff said approximately one-third of all mergers are due to a lack of a succession plan, Hopkins County FCU said its “long-time management” is retiring.
The credit union said that upon completion of the merger it will close its one branch.
HCTFCU reported net income of $18,187 at year-end 2021, with net worth of 18.04%. It said there are no plans to distribute any of the net worth to members.
Owensboro FCU reported $1.652 million in net income with net worth of 8.11%.
‘Market Conditions’ Cited in Texas
In Waco, Texas, the $8.1-million C-T Waco FCU has set a date of March 19 for members to vote on plans to merge into the $225-million Members Choice of Central Texas FCU.
In its disclosure to members, C-T Waco said its board had “concluded that due to current market conditions and an overall decline in the financial condition of C-T Waco FCU, a merger is necessary and in the best interests of members.
C-T Waco, which has approximately 855 members, reported a loss of $142,744 at year-end 2021, with net worth of 4.78%.
C-T Waco, which said it will close its main office as a result of the merger, added, not surprisingly, it will not be distributing any net worth to members. It also indicated there will be no merger-related payout to management or the board.
Members Choice of Central Texas, which has approximately 20,000 members, reported net income of $2.435 million and net worth of 12.68%.
A Net Worth Distribution in Pennsylvania
In the Keystone State, the $2-million Peoples Natural Gas General Office Employees Federal Credit Union in Pittsburgh, said its members will vote on March 18 on a merger into the $203-million Century Heritage FCU, also based in Pittsburgh.
In its statement to members, PNGGOEFCU cited a wider array of products, additional branches and greater operational efficiencies as benefits of the combination.
PNGGOEFCU reported $2,331 in net income as of Sept. 30, 2021, with capital of 19.75%. It said it plans to distribute a portion of its net worth back to members as a result of the merger based on members’ share and loan balances.
Century Heritage, which has approximately 17,000 members, reported net income of $268,293 and net worth of 9.51% as of Sept. 30.
‘Unprecedented’ Pressures in Keystone State
Also in Pennsylvania, the $22.8-million, Media-based Wawa Employees CU has set a date of March 16 for members to vote on a merger into the $1.6-billion Franklin Mint FCU in Chadd’s Ford, Penn.
“WECU has served our member-owners for 45 years period however, small credit unions face unprecedented regulatory, cyber security, and economic pressures to remain viable and profitable,” the Wawa Employees CU said in a statement to members. The statement included an extensive side-by-side list of offerings from the two CUs, showing Franklin Mint’s menu is far more extensive.
WECU said the merger would provide improved financial safety and soundness and expanded products, including digital tools, to its 3,600 members.
Wawa Employees reported a net loss of $34,893 at year-end with net worth of 7.25%. WECU said there are no plans to distribute any net worth, nor will there be any merger-related compensation for anyone.
Franklin Mint CU reported $12.961 million in net income and net worth of 7.70% on its most recent call report.