The $34.6 million Ace Community Credit Union in Ames, Iowaintends to merge into the $389 million CommunityChoice Credit Union in Johnston, Iowa.

The boards of directors for both cooperatives approved an intentto merge agreement on Jan. 3, according to a joint statement.

“We explored many options and a partnership with CommunityChoice Credit Union was the best strategic decision for us, andalso a great opportunity for our members,” said Timothy Wallen,Ace Community president/CEO. “Both Ace and Community Choicehave a long and storied tradition of providing exceptionalpersonalized service to our members. Our employeesshare the goal of providing highquality financial services to ourmembers.”

Credit unions with fewer than $50 million in assets areincreasingly merging with larger credit unions because leaders sayit has become more challenging for small credit unions tocompete.

Though Ace Community CU has a net worth of 17%, well above peeraverage 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, AceCommunity posted a net income loss of $32,883.

The proposed merger must secure approvals from the NCUA, theState of Iowa Credit Union Division and the 3,281 members of AceCommunity.

“Once all approvals are received, we will warmly welcome all AceCommunity Credit Union members to the Community Choice family. Bycombining the strengths of both credit unions, we will be expandingthe service offerings for both membership groups,” said RogerReiser, president/CEO of Community Choice. “We will be able toprovide Ace Community Credit Union members with improved productlines, 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.