The $2.8 billion Hudson Valley Federal Credit Union of Poughkeepsie, N.Y., expects to complete a merger of the ailing, $50 million Putnam FCU of Carmel by July 1, the credit unions have announced.
Sal Gambino ,the CEO of Putnam FCU, acknowledged the CU's board felt pursuing a merger now would be both "in the best interest of serving our members with a broader product line" as well as a reflection of conditions impacting small CUs in New York state.
"I suspect there could be more mergers to come," said Gambino pointing to the latest NCUA assessments along with corporate losses including at Members United Corporate FCU. Putnam, with a 3.64% capital ratio, lost just under $1 million last year and $17,000 in the first quarter.
Gambino said Putnam approached Hudson Valley about a possible consolidation "several months ago after our board felt it was the right time to make a change."
For its part, Hudson Valley has a 9.85% capital ratio and earned $14.5 million last year. The CU said it welcomed the additional field of membership expansion into nearby Putnam County, taking on Putnam's 7,100 members and two branches. Hudson Valley operates 15 branches in Dutchess, Orange, Ulster and Putnam counties including four facilities in IBM offices.
In a formal statement, the former chairman of Putnam, Albert R. Witte, said in recent years it became apparent that "small financial institutions such as ours have been unable to keep up with our members' evolving needs for additional products and services."
In addition, following an analysis of Hudson Valley, "we came to the conclusion that our membership would strongly benefit from a merger with HVFCU. In fact, many of our members already have accounts with HVFCU, making the merger all the more practical," Witte said.