BOSTON—The $5.2-million Cabot Boston Credit Union here has agreed to merge into the $2.2-billion Merrimack Valley Credit Union, based in Lawrence, Mass., WHAV reported.
Members of both organizations recently approved the combination in separate votes. The merger is expected to be completed on Jan. 1, WHAV said.
As CUToday.info reported, Merrimack Valley Credit Union plans to change its name to BrightBridge next year.
“By joining forces, we’re creating a stronger, more robust organization that will provide enhanced financial services and benefits to our credit union family,” said Merrimack Valley Credit Union President and CEO John J. Howard.
“Throughout the merger process, the needs of our members have remained at the forefront. MVCU shares our commitment to serving our members and supporting our communities,” said Cabot Boston Credit Union Manager Marta Carney.
Cabot Boston lost $47,396 in net income 2023 and $54,552 through September of this year, according to Call Report data. The CU’s capital is high (18.55%). Merrimack Valley made $8.5 million in net income in 2023 and $6.5 million through September. The CU’s capital is 10.09%.
CEO Advisory Group Analysis
"By joining forces with Merrimack Valley Credit Union, the current and future members of Cabot Boston Credit Union will see increased value in rates, products and locations," said CEO Advisory Group President/CEO Glenn Christensen. "There are a lot of considerations that go into a credit union electing to merge. In this case, from a purely financial standpoint, it would appear the membership would have been substantially better off by merging much sooner."
Since 2005, Cabot Boston Credit Union has been in a steady decline, noted Christensen.
"Assets stood at $8.9 million, net worth ratio at 18.5% and the number of members at 1,032. Since 2005, credit union assets and membership has steadily declined, and the CU had losses in all but three years," Christensen said. "The membership has dropped by a third and now stands at 681 members.
"The experience of Cabot Boston Credit Union is not too dissimilar to many other small credit unions that are overburdened by regulations, technology and changing member expectations," continued Christensen. "The difficulties facing small credit unions is exemplified by the fact that over 70% of credit unions under $50 million in assets had a net loss of members during the last five years. In many cases it is difficult for smaller struggling credit unions to find a strong merger partner as the larger credit union does not want a merger to get in the way of other initiatives. Finding a strong partner like Merrimack Credit Union will surely be of great benefit to all the stakeholders."