First Commonwealth Merger Is Completed
In its first merger in three years, the $480 million First Commonwealth Federal Credit Union of Lehigh Valley, Pa., has completed a consolidation of the ailing Dixie Cup Employees FCU of Easton.
The merger of the $1.2 million Dixie Cup does fit ongoing problems of small CUs "in Pennsylvania and elsewhere coming under pressure" of market conditions, said Jo Ann Broderick, president/CEO of First Commonwealth.
Dixie Cup, with 500 members and serving employees of the products firm in nearby Forks Township, "had been asked by NCUA to seek a merger partner," said Broderick. Talks with Dixie Cup CU had begun last April. The CU had a net loss of $45,000 in 2009 and its losses through the third quarter were at $43,000.
First Commonwealth is not specifically looking for further mergers in 2011, said Broderick, stressing her CU is prepared to continue providing financial assistance to struggling Pennsylvania CUs.
"There was a chapter meeting yesterday of the Pennsylvania [CU] Association in which small credit union officers did indeed voice their fears about large credit unions merging them," said Broderick, emphasizing that her CU has no predatory goals.
First Commonwealth, the largest CU in the Lehigh Valley and 44,000 members, has branches in Allentown, Bethlehem, Easton, Fogelsville, Kutztown and Lehighton.