REVERE, Mass.–Ten more credit unions have announced plans to have their members vote on a merger during the first quarter of 2022.
In this analysis, CUToday.info features five of those CUs, with another five to be featured on Tuesday, Feb. 1.
In keeping with discussion at NCUA’s most recent board meeting at which it was noted approximately one-third of CU mergers are driven by a lack of succession planning, several of the CUs stated that a retiring manager was the reason they were seeking to close up shop.
Also worthy of note: even in cases where capital was very high, only one of the 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.
Here’s a look at five of the latest merger announcements:
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 vi
able 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.