American 1 Merges Michigan Services, Drops Federal Charter
The $240 million American 1 FCU of Jackson, Mich., is merging a struggling Detroit area CU, the $10.9 million Michigan Services CU, next month and in the process switching to a state charter.
American 1 provided no formal explanation for the conversion but said the consolidation of the suburban Southfield CU won approval Wednesday from the American 1 membership.
A spokesman for the 1,300-member Michigan Services, with capital at 9%, said the merger was sought to provide a broader range of products and services, including bill pay, to its members that could be extended by American 1.
Michigan Services also said the merger allows greater “community involvement.”
Michigan Services lost just under $150,000 in 2010 and $49,000 through the first half.
American 1, with 49,000 members and nine offices in south-central Michigan, noted that it posted an ROA of 1.72% placing the CU in “the top 4% of more than 7,000 credit unions in the United States for net income.”
As a state charter, American 1 “will continue to offer a wide range of consumer banking services with a specialty in auto loans.”
The American 1 announcement of the merger, issued by David Puckett, president/CEO, also took note of the CU merger trend.
Mergers like this one, said American 1’s statement, “are becoming more common among credit unions as the financial industry becomes more competitive and strives to keep up with rising costs and increased regulation and compliance.”
Earlier this summer, American 1 announced plans to merge with the $55 million Premier Financial CU in Detroit.