SALT LAKE CITY -- Culminating five years of talks, the $2.4 billion Mountain America Federal Credit Union is merging with the 67-year-old Salt Lake CU, which retains a 26,500-member base of city employees and SEG groups.

The merger plan, due for approval at a membership meeting last week, would serve to bring new product and technological efficiencies to a CU that more recently has had to set aside reserves for mortgage and construction loan writedowns in reporting a $3.6 million loss for 2007, according to Orla Beth Peck, supervisor of credit unions at the Utah Department of Financial Institutions.

"This is a voluntary merger," stressed Peck, maintaining the consolidation is another example of the national trend of small CUs being merged into larger brethren.

"There's a merger of a small credit union every day across the U.S.," observed Peck.

In its recent call reports, Salt Lake CU had a net worth of 5.57%, "considered adequately capitalized but below well capitalized," explained Peck. Its return on assets was at negative 1.58% and reportedly had $32 million of loans 30 days past due.

In the formal announcement, Mountain America and Salt Lake CU said the merger was being pursued to give Salt Lake CU members access to more products, ATMs and branches. Salt Lake CU has 10 branches while Mountain America has 50.

"We have had a good relationship with Mountain America for years, and we felt this was a great opportunity for us," said Clare Collard, vice president of public relations at Salt Lake CU. She also acknowledged the CU's need for set asides because of the real estate loan problems, a condition hanging over a number of Utah CUs and banks.

The CU partners, said the release, "have been in discussions regarding a merger for more than five years."

In the statement, Karen Wiley, chairman of Salt Lake CU, said directors "believe this partnership will be extremely beneficial for all members and provide convenience and added strength."

Mountain America forecast the merger process would take several months and require approval by the state, the NCUA and a review by the Federal Trade Commission.

In commenting on the merger trend in Utah, Peck said there have been three mergers this year, including Salt Lake and Mountain America, equaling the yearly average, suggesting the state may now be ahead of last year.

Apart from Mountain America, Salt Lack CU has also worked closely over the years with Goldenwest CU of Ogden to build its branch and member base.

[email protected]