Sometimes a merger can mean more than two cooperatives combiningto form a bigger and stronger credit union. Sometimes it can mean abig dividend payout for members.

Following the recently completed merger of two Houstoncredit unions – the $120 million El Paso Corporation Federal Credit Union and the $365million First Service Credit Union – the 7,300 members of EPCFCUbecame the beneficiaries of a $9.5 million dividend pay out.

The average payout per member was approximately $1,300. However, the amounts varied greatly from member to member becausethe calculations were based on the average deposit balances of eachmember in 2012, according to First Service CU. The dividends werepaid to members April 25.

“The members-owners of EPCFCU should receive a benefit of thecapital they helped earn over the lifetime of that credit union,”said David Bleazar, president/CEO of First Service CU. “They werethe reason the credit union was able to grow, remain strong andbecome a desirable merger partner for our organization.”

Formed in 1949 with 994 members and assets of $82,178, EPCFCUhad indeed grown over the decades.

However, even though EPCFCU posted a net worth of 18.38% at theend of 2012, its net income has been steadily declining over thelast four years from $717,366 in 2008 to $203,489 in 2011,according to NCUA financial performance reports.

At the end of 2012, the credit union posted a net loss of$100,329, and at the end of the first quarter of this year, itrecorded a net loss of $709,325, according to NCUA financialperformance reports.

What's more, after Kinder Morgan Inc. purchased El Paso Corp. inMay 2012, the credit union was informed it would lose its solecorporate sponsor. From 2011 to 2012, EPCFCU's membership fell from8,170 to 7,441. In 2008, the credit union served a membership ofnearly 9,000.

The merger was closed April 1. All of the former EPCFCUemployees were retained by First Service CU, and credit union's onebranch was converted to a First Service CU branch. The datasystem conversion is scheduled for completion July 1.