It’s been a big year for mergers – four of them – for the $540 million Great Lakes FCU in North Chicago, Ill., with the latest providing a toehold into the Milwaukee, Wis. market.
“Yes, we have tried to be supportive to small credit unions that experienced capital problems and look to us for help,” Vikki I. Kaiser, president/CEO of Great Lakes, said of the consolidation of the long-troubled $11 million Federated Family CU of Milwaukee approved last week by the NCUA.
Federated is a victim of the 2009 subprime loan disaster befalling a string of southern Wisconsin and Illinois CUs following the collapse of Central States Mortgage Co., an industry-run CUSO in the Milwaukee suburb of Wauwatosa.
At least four of the original 24 CU investors in CSMC have also opted for mergers. Federated Family had told its members last April that it would be looking for a merger partner after writing off $1 million in losses from the CUSO’s failure.
“The reserves of FFCU have been significantly reduced which resulted in numerous meetings” with regulators as the Milwaukee CU operated “under a mandated net worth restoration plan,” Federated Family said in unveiling the Great Lakes merger bid.
Lamenting the fate of CSMC, Federated Family said it hoped “that losses from CSMC would diminish as the bankrupt properties were sold but that has not been the case,” adding that “indications are that losses will continue in the years ahead.”
Great Lakes said it agreed to the Federated Family merger because both CUs serve a similar member base of federal employees, including at the Federal Reserve in Milwaukee and Chicago. It had nine branches and now adds two more from Federated Family.
Kaiser said she hopes to complete data conversion on the FFCU merger by Nov. 1, adding that Great Lakes FCU remains open to more mergers with Illinois or Wisconsin CUs grappling with compliance concerns “or the lack of loan volume and little investment income.”
During 2011, Great Lakes merged two tiny suburban Chicago CUs, the $300,000 Chicago Heights Onized FCU and the $533,000 Local 701 IBEW CU of Warrenville. In addition, it merged the $20 million H-F CU of Country Club Hills.