Webster First Adds Fourth Massachusetts Merger, Filene Federal Credit Union
The $619 million Webster First Federal Credit Union, active in 2011 with three Massachusetts mergers, is expanding its Boston footprint this month by taking over a fourth, the $20 million Filene Federal Credit Union.
Members of Filene, whose employee base is tied to the now-shuttered Filene retail chain once operated by credit union pioneer Edward Filene, approved the merger with Webster First at a meeting Tuesday.
The NCUA had approved the transaction Jan. 25 with a similar OK received from the Massachusetts Share Insurance Corp. The merger, which had been under discussion for some months, becomes formally effective Saturday.
“We are grateful Filene management and members chose us based, we believe, on our financial strength – 18% capital and ROA of 1.12,” said Michael Lussier, president/CEO of Webster First, headquartered in Worcester. Lussier is also the current chairman of NAFCU.
The 1,700-member Boston credit union has maintained a steady capital position but did lose $199,000 in 2010 and $510,000 in 2011.
Filene’s decision to merge, said Lussier, underscores the plight of many small credit unions “who realize the difficulty of operating in today’s challenging regulatory environment and trying to do business with narrowed margins.”
Lussier said there are no plans to scout further merger possibilities in Massachusetts. “But our eyes are always open,” he said.
Filene has one downtown Boston branch and is one of the state’s oldest credit unions. The famed Filene Basement store closed in December after an earlier bankruptcy sale.
Since last July, Webster First has completed the mergers of Saugus FCU, Winthrop FCU and Fitchburg FCU. The Filene addition would increase branch penetration in the Boston area to five plus a sixth planned in Hopkintown. Webster First has 17 branches statewide.
Asked about Webster First’s interest in purchasing a savings bank, along the lines of the $345 million GFA FCU in nearby Gardner, Lussier said, “Yes, but only if it fit our business model.”
That milestone takeover of an ailing New Hampshire bank is expected to take months to win FDIC, NCUA and state approval.
The ailing $82 million Monadnock Community Bank of Peterborough has been under a DOR and sought out both bank and credit union buyers.
“I congratulate GFA’s CEO for pursuing that kind of transaction,” said Lussier. He also said he has no interest in following the path of a competitor, HarborOne of Brockton, in pursuing a charter switch to a mutual savings bank.