The $3 million Glenvil Cooperative Credit Union is awaitingapproval from the Nebraska Department of Banking and Finance and the NCUA to beacquired by the $1.2 billion First York Bancorp.

The credit union is the only financial institution located inGlenvil, Neb., a town of just 320 residents in the south centralpart of the state.

Glenvil Chairman Steve Hinrichs said the credit union faceschallenges typical of its asset size: retaining management andcompliance.

“We can't produce enough income to hire decent help,” he said.“Every time we get a good manager trained, they move on to biggerand better things.”

Compliance also killed the 292-member credit union, Hinrichssaid.

“These days, it takes more manpower because there are so manynew regulations. Just trying to stay compliant is monumentalfor a little credit union like ours,” he said.

Hinrichs said the credit union approached the bank, whichoperates under the subsidiary name Cornerstone Bank in the area,because it specializes in providing mortgage and agriculturallending in small towns.

The $20 million Hastings FCU, the closest credit union located10 miles away in Hastings, Neb., doesn't offer mortgages or aglending, he said.

“Farmers drive the economy here,” he said.

Keeping a branch in Glenvil was the board's top priority whenseeking a financial institution to acquire the credit union, thevolunteer said.

“That's exactly what's it about, keeping that convenience,” hesaid. “It would be a loss of one more business in town, anothernail in the coffin here.”

Cornerstone has been upfront with the credit union board,Hinrichs said, saying if the branch isn't profitable within threeto five years, it may close. However, he said the credit union'sprospects of staying in business that long weren't any better.

Hinrichs, a local tree farmer and landscaper, declined to saymore about the deal because members may have to vote on theacquisition.

However, he did say the credit union took an informal poll ofmembers earlier this year and found they overwhelmingly supportedfinding a financial institution to acquire the credit union, ratherthan face the possibility of losing the only financial institutionin town.

As of Sept. 30, Glenvil Cooperative reported just 5.46% networth, falling from 7.83% as of Dec. 31, 2011. Loan quality is aproblem: as of Sept. 30, 6.56% of total loans were reporteddelinquent, and 1.59% were charged off.

The credit union's net margin of 6.05% as of Sept. 30 is higherthan its peers, as is Glenvil Cooperative's fee income and loanyield. However, expenses are also higher, and provisions were 4.11%of average assets as of Sept. 30.