Credit union mergers in Virginia took an uptick this week withconsolidation plans unveiled for two separate combinations ofmid-sized credit unions in Richmond and Roanoke.

In both cases, the boards and management stressed the overallhealth of the parties but said the decision to combine was anoutgrowth of continuing challenges on compliance, managementsuccession and technology and other areas.

In Richmond, the $125 million Henrico FCU said it won NCUAapproval to merge the $55 million Bellwood FCU in a process to becomplete by July 1. Members of Bellwood will vote on themerger deal this Thursday at a Richmond country club.

In a statement, Bellwood said “ccombining these two financiallysound credit unions will result in a credit union with more than$180 million in assets, serving over 30,000 members with apotential of 1.2 million throughout 15 counties as well as thecities of Petersburg, Colonial Heights, Hopewell and Richmond.”

Bellwood also pointed out “it would take many years for BellwoodFCU to grow to this level and be able to provide the numerousbranches, more competitive products and new technologies” thatHenrico can provide.

Susan Epperson, vice president of retail at Henrico, saiddiscussions between the two credit unions have been under way sincelast fall and coincides with retirement of Bellwood'spresident/CEO, Daniel Adams.

“Our goal now is to generate some loans and grow and we thinkthe merger will help toward that end,” said Epperson.

In Roanoke, crosstown competitors, the $34 million RoanokeValley FCU and the $27 million Roanoke County Schools CU of Salem,said they had also won NCUA approval to merge with a member vote byRoanoke County Schools held March 27.

“I'd say this is a unique kind of a merger of two credit unionswho are on opposite sides of the city but have worked closetogether in the past,” explained Woody Windley, president/CEO ofRoanoke Valley, the surviving credit union.

While adequately capitalized, Roanoke County Schools has beenwithout a CEO for a year, struggled with compliance issues andoverall growth and decided a merger was the best option, Windleysaid.

“Rather than spending large amounts on finding managementtalent, Roanoke County discussed with us a year ago the mergerprospect” said Windley. The combined credit union will have morethan 11,000 members and three branches and will look at coming upwith a new name, he said.

The Virginia Credit Union League said it expects to see more mergers as the economy improves.

“Credit union merger activity slowed, for a period, after theeconomic downturn in 2008 and the ensuing corporate credit unionrestructuring as credit unions took stock of their own financialpositions including declining net worth, increasing delinquenciesand charge-offs,” said league Senior Vice President DavidMiles.

“As the economy has begun to turn around and we are seeingeconomic growth, there is some pent up demand for merger activityamong credit unions. With a clearer picture of where they standfinancially and what growth opportunities are available, creditunions are again considering strategic mergers,” Miles said.