The boards of the $1.1 billion Dupaco Community Credit Union in Dubuque, Iowa, and the $83 million Iowa Community Credit Union in Cedar Rapids have approved an intent-to-merge agreement.
The agreement means Iowa Community CU will merge into Dupaco Community CU during the first quarter of 2014.
Longtime Iowa Community Credit Union President/CEO Mark Heth's decision to retire prompted a lengthy fact-finding analysis of financial institutions to merge with, said Iowa Community CU Board Chair Gene Brown. Heth joined Iowa Community as CEO in 1986. Prior to that, he served as a consultant for the Iowa Credit Union League in Des Moines.
Heth said Wednesday that he plans to retire after the merger is completed though he will be available for any support if needed.
"The board concluded that Iowa Community members and employees will benefit substantially, both in the short- and long-term, by partnering with Dupaco Community Credit Union," he said in a prepared statement released Wednesday by both credit unions.
Iowa Community CU was chartered in 1950 and serves more than 10,000 members.
The intent to merge agreement is the first formal step in a process. After due diligence, the proposed merger must be approved by state and federal regulators, as well as the Iowa Community CU membership.
"This partnership is a proactive step by two financially sound institutions to capitalize on their strengths and position the new organization to move successfully into the future," said Dupaco Board Chair Jeff Gonner.
Though Iowa Community CU posted a net income loss of $220,596 in 2008, it recorded net income gains of $90,000 in 2009, $165,136 in 2010, $156,000 in 2011 and $715,000 last year, according to NCUA financial performance reports.
Dupaco Community CU has increased its net income gains from $3.1 million in 2008 to $21 million in 2012, according to NCUA financial performance reports.
The combined institution would have 18 branches and more than 80,000 members, with locations serving the Dubuque, Cedar Rapids, Waterloo, Cedar Falls, Dyersville, Manchester and Carroll communities in Iowa, as well as Platteville, Wis., and Galena, Ill.