Marking its first proposed merger in six years, the $720 million RTN Federal Credit Union of Waltham, Mass., said Friday it hopes to complete consolidation of the struggling $74 million Medical Area Federal Credit Union of Brookline, Mass., by Aug. 1.
RTN said it was one of four or five Massachusetts credit unions that had been considered as a merger partner by the MAFCU board starting about three months ago as that credit union saw its capital ratios drop sharply to 4% and it posted a $1.2 million loss last year.
“The credit union had expanded significantly with new products and processes but its income did not keep pace, though recently it has shown a profit,” said Thomas Weikle, director of communications at 38,000-member RTN FCU. “We are delighted to have been chosen since we will be adding two new branches and 11,000 members.”
MAFCU’s younger member base should also benefit RTN, Weikle said. Its members will vote on the RTN takeover next Wednesday, RTN said.
The RTN deal with MAFCU marks the latest in a series of Boston-area mergers.
“Yes, we’ve had a lot of mergers here but you have to remember we have a concentration of smaller, municipal credit unions that started here in the beginning of the credit union movement,” said Roland Draper III, CEO of the $37 million Somerville Municipal FCU.
Draper, who said his credit union is performing well with no interest in pursuing any form of a merger, was elected to the league board replacing James Blake, president/CEO of the $1.9 billion HarborOne CU which resigned CUNA months ago while his credit union pursues a conversion to a mutual co-op bank.
Draper said he will be filling out two years of Blake’s three- year term on the league board.
And as for the conversion move, Draper said it is a development “that has stirred the industry” but like others is not something that his Somerville intends to pursue.
Weikle said RTN, too, has no interest in a bank conversion. “We definitely support the credit union model,” he said.