Merger Pace Quickens
The fallout from the recession continues to trigger more credit union mergers.
There was a loss of 29 credit unions in September, which brought the total industry count to 7,898 according to CUNA Mutual Group's November Credit Union Trends Report, citing data from CUNA. Through the first three quarters of 2009, the CU count declined by 190 institutions. The current rate of consolidation is well below both its long-term trend rate and 2008 results, the data showed.
On a year-over-year basis, the industry has lost 282 CUs. It now appears that 2009 will be the third consecutive year of below trend consolation, according to CUNA Mutual Chief Economist Dave Colby. Looking out into 2010, mergers and liquidations of troubled CUs may pick up from its current path and strategic mergers accelerating, as healthy CUs become more confident in their capital levels, he added.
"The combined stresses of the deep recession, credit quality challenges, and share insurance assessments have triggered more mergers due to financial problems, but fewer strategic combinations. We define strategic combinations as mergers which improve economies of scale, achieve economic and/or geographic diversification, and/or add mutually beneficial fields of membership," the trends report noted.