January Mergers Show Lull in Trend
January was a slow month for credit union mergers.
Twelve consolidations in the first month of 2014 were approved by the NCUA, according to its latest monthly Insurance Activity Report. That number is down from the 17 mergers approved in January 2013 and 22 consolidations in January 2012.
All of the credit unions that received the OK to merge were under $50 million in assets. January's approved mergers occurred in 10 states. New York and Massachusetts each had two mergers, while Connecticut, Michigan, Vermont, Pennsylvania, Florida, Arkansas, Illinois and Idaho each had one.
Nine of the approved mergers will allow credit unions to expand services to members. One credit union received the green light to merge because of its inability to attract a new CEO, and consolidations for two credit unions were approved because of poor financial condition, according to the NCUA report.
The $10.7 million, Local #170 Teamsters Federal Credit Union in Worcester, Mass., was one of the two credit unions that received approval to merge because of poor financial condition. The 1,260-member credit union's total loans dropped from $4.3 million in 2009 to $3.3 million in 2013, while its loan income fell from $292,567 to $206,231 in the same years, according to NCUA financial performance reports.
Moreover, Local #170 Teamsters FCU posted a total net income loss of more than $987,000 over the last five years, NCUA financial performance reports show. The credit union is expected to merge with the $48 million, 6,515-member New England Teamsters Federal Credit Union in Arlington, Mass.
The $6 million, 849-member Keystone First Federal Credit Union of Hazelton, Pa. also claimed poor financial condition to receive its NCUA approval to consolidate with the $117 million, 8,538-member PPL Gold Credit Union in Allentown, Pa.