NCUA Approves 53 Mergers
The NCUA approved 53 credit union mergers in the first quarter of 2014, which is substantially lower than the 71 approved consolidations during first quarter 2013, and the 62 approved mergers two years ago.
However, this year’s first quarter number is higher than the 36 mergers approved in 2011 and 35 consolidations in 2010, according to NCUA Insurance Activity Reports.
In March, the NCUA approved 24 mergers, compared to 34 consolidations approved in March 2013.
NCUA’s March Insurance Activity Report, however, shows eight credit unions were given the green light to merge because of their poor financial condition. Typically, NCUA’s monthly reports list only two or three credit unions that are allowed to merge for that reason.
Six of the eight credit unions — all with fewer than $6 million in assets — posted net worths of less than 7%, according to NCUA financial performance reports. And, all reported falling loan, fee or investment income, as well as net income losses over the last five years.
The six credit unions are the $5.6 million Union Settlement FCU in New York City, to merge with the $37 million Lower East Side People’s FCU also in NYC; the $5.8 million Oldham Family Alliance FCU in Baltimore to consolidate with the $32 million Members First of Maryland FCU in Baltimore; the $3.1 million CGHFCU in New Kensington, Pa., to merge with the $14.9 million Alleg-Kiski Postal FCU in New Kensington, Pa.; the $4 million Chesapeake City Employees Credit Union in Chesapeake, Va., to merge with the $1.3 billion Bayport Credit Union in Newport News, Va.; the $3.7 million Floyd County Postal Employees Credit Union in Rome, Ga., to consolidate with the $2 billion Atlanta Postal Credit Union in Atlanta; and, the $133,036 Langston FCU in Langston, Okla., to merge with the $3.2 billion Tinker FCU in Oklahoma City.
The $8.4 million Essex Division Telephone FCU of Maplewood, N.J., and the $6.7 million Bi-Mart FCU in Eugene, Ore., were also given the green light to merge because of poor financial condition.
Though Essex Division Telephone FCU had a net worth of 8% in 2013, it was still below peer average of 14%. The credit union also was below peer averages in return on average assets, gross income, net margin and net interest margin, according to NCUA financial performance reports. EDTFCU was approved to merge with the $292 million Garden Savings FCU in Parsippany, N.J.
Likewise, Bi-Mart FCU in Eugene, Ore., posted a net worth of 9% last year, but it was below peer average of 14%. The credit union also was below peer averages in return on average assets, gross income, yield on average loans, net margin and net interest margin, NCUA financial performance reports show. Bi-Mart was approved to consolidate with the $1.2 billion Oregon Community Credit Union in Eugene.
The $35 million Ace Community Credit Union in Ames, Iowa, was given NCUA approval to merge because of its lack of growth.
Though NCUA financial performance reports show the 2,835-member credit union posted a net worth of 17%, above peer average of 12%, it was below peer average in return on average assets, gross income, yield on average loans, net margin and net interest margin.
NCUA approved Ace Community CU’s merger with the $404 million Community Choice CU of Johnston, Iowa.
The NCUA also approved a merger for the $17.9 million Resources FCU in Richmond, Va., because of diminishing sponsor support. The 1,666-member credit union received approval to consolidate with the $54 million Peoples Advantage FCU in Petersburg, Va.
The largest merger approved in March was the $606 million Pioneer Credit Union in Green Bay, Wis., with the $480 million Capital Credit Union in Kimberly, Wis. The consolidation, which will create Wisconsin’s newest billion dollar credit union, was announced in June 2013 and is expected to be completed in July.
Twenty-one of the credit unions that received merger approval had less than $50 million in assets.
Fourteen mergers were approved for expanded services, including the $65 million Laclede Community Credit Union in Alton, Ill., merging with the $514 million 1st America Credit Union in Bethalto, Ill., and the $59 million Gateway Community FCU in Missoula, Mont., with the $127 million Park Side Financial Credit Union in Whitefish, Mont.