Pelican State Merging Lake Charles Telco
The $171 million Pelican State Credit Union of Baton Rouge said it expects a July 1 merger of the $1.9 million Lake Charles Telco CU in a move that will provide the Baton Rouge CU greater entry into the Lake Charles market.
The consolidation has been under consideration by the Telco board for more than a year and is part of the ongoing national trend on mergers as small CUs "simply find the economics too difficult to compete and still provide members a broad range of services," said Jeffrey K. Conrad, Pelican president/CEO.
The two-employee Lake Charles Telco, which had been healthy with satisfactory capital, had long operated as a cash CU having to use other financial institutions to handle back office paperwork, said Conrad. He cited management's desire to start offering online and debit card services to its 3,500 members as a reason behind the merger.
There are no plans, said Conrad, to court other merger prospects but conditions among small CUs in Louisiana and elsewhere point the way for the consolidation wave to continue at a steady pace, Conrad forecasted. Last January Pelican State merged Pinekraft FCU.
"When you think of interchange, ODP, risk based lending and red flags among other areas, you can see why many small credit unions see the need to look at a merger even if it is unfortunate," observed Conrad.
Pelican with 30,000 members has 10 branches with the Telco merger creating the 11th.