The $34.6 million Ace Community Credit Union in Ames, Iowa intends to merge into the $389 million Community Choice Credit Union in Johnston, Iowa.
The boards of directors for both cooperatives approved an intent to merge agreement on Jan. 3, according to a joint statement.
“We explored many options and a partnership with Community Choice Credit Union was the best strategic decision for us, and also a great opportunity for our members,” said Timothy Wallen, Ace Community president/CEO. “Both Ace and Community Choice have a long and storied tradition of providing exceptional personalized service to our members. Our employees share the goal of providing high‐quality financial services to our members.”
Credit unions with fewer than $50 million in assets are increasingly merging with larger credit unions because leaders say it has become more challenging for small credit unions to compete.
Though Ace Community CU has a net worth of 17%, well above peer average of 12%, its net income declined from $270,754 in 2008 to $22,457 in 2012, according to NCUA financial performance reports. And at the end of the third quarter on Sept. 30, 2013, Ace Community posted a net income loss of $32,883.
The proposed merger must secure approvals from the NCUA, the State of Iowa Credit Union Division and the 3,281 members of Ace Community.
“Once all approvals are received, we will warmly welcome all Ace Community Credit Union members to the Community Choice family. By combining the strengths of both credit unions, we will be expanding the service offerings for both membership groups,” said Roger Reiser, president/CEO of Community Choice. “We will be able to provide Ace Community Credit Union members with improved product lines, financial planning services, expanded technology services, and greater financial stability.”
The proposed merger is expected to be completed in early 2014, the joint statement said.