ESCANABA, Mich.–Two credit unions in Michigan have announced plans to seek member votes on mergers, one of which would cross state lines if approved.
In Escanaba, the $24-million, 2,185-member Northern United Credit Union said it is seeking to merge into the $113-million U.P. State Credit Union. The combined CU would have approximately 11,500 members.
Northern United reported negative net income of $68,949 and net worth of 11.31% as of Sept. 30, while U.P. State reported $558, 887 in net income and net worth of 7.36% as of the same date.
In its disclosure statements filed with NCUA, Northern United said, “The board of directors has concluded that the proposed merger is desirable and in the best interest of members because if approved, the merger will expand financial products and services available to our members, provide greater access to those products and services, and provide enhanced mobile and online functionality that offers the latest features and security.
“Over the years, Northern United Federal Credit Union has been unable to invest in services today's member requires, and as a result membership has declined. The inability to grow loans is problematic in our current rate environment, following the COVID pandemic. Investing existing funds will no longer yield enough to cover current and future expenses.”
The credit union said it has been exploring a merger for several years and that there will be no distribution of net worth to members, citing, “the difference in the credit union’s net worth once all one-timer merger costs are deducted.”
NUFCU said CEO/Manager Karen Dall will be paid severance of $12,231 as part of the merger.
The CU will hold a special meeting related to the merger on Feb. 22, 2022.
Waving the Four Flags
In Niles, Mich., the $6.376-million Four Flags Area Credit Union said it plans to merge into the $249.5-million Great River FCU across the state line in Saint Cloud, Minn.
Four Flags Area CU reported negative net income of $24,484 and net worth of 5.36% as of Sept. 30, while Great River reported net income of $1.12 million and net worth of 8.59% as of the same date.
In its disclosure form filed with NCUA, FFACU told members, “The merger is in the best interest of members because the opportunities and efficiencies afforded by merging with a larger organization are undeniable. This partnership would create a credit union that offers you even more value than you have today. In planning for the future both credit unions realized that a combined organization would bring much greater strength and competitive advantages that each could (not) provide on its own.”
With capital below 6%, Four Flags said it will not be distributing any net worth. Manager Chandra Ashby will see a pay increase of $19,346 with the new credit union, while two employees will see hourly pay increases.
A Dec. 30 meeting date has been set for members seeking additional information.