Credit Union Mergers

Credit Union Mergers

It seems the only thing that never changes is the very fact that everything always does. That is certainly true regarding credit union mergers. As larger institutions seek to gain market share, smaller credit unions are acquired and brought into the family. Usually, the merger is beneficial for both parties. This was the case recently with PenFed (Pentagon Federal Credit Union). They acquired Fort Worth based Corps of Engineers Federal Credit Union, a $ 42 million dollar institution.

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The merger provided PenFed with more market share in the Fort Worth area, an important strategic market. The $ 92 million AAFES Federal Credit Union also consolidated with PenFed. The merger expanded the credit union by 6,500 new members and opened up a potential membership field of 35,000 employees of the United States Army and Air Force Exchange Service. The membership field represents every state and U.S. territory. That scenario creates the perfect setting for a great merger.

Why Mergers Happen

Not all credit unions are thrilled about the prospect of merging. A Filene Research Report found some smaller credit unions seemed to occasionally oppose a merger when the subject is raised. The reason? Simple. A merger can often be viewed as a negative set of circumstances rather than a positive move. Oftentimes, those mergers only occur when a tipping point is reached; either a CEO retires, or the credit union is perhaps experiencing some difficult financial times, or, it can simply be in the best interest for the members at large. For example, look at the list of 10 credit unions that accepted a merger deal last year:

$ 4.6 million Healthcare United Federal Credit Union, Baltimore, MD

$ 9 million Tri-Point Federal Credit Union, Pittsburgh, PA

$ 1.3 million Kolmar New York Employees Federal Credit Union, Port Jervis, NY

$ 42.9 million Kent Credit Union, Kent, OH

$ 2.4 million N.E.A.R.M.C. Employees Federal Credit Union, Anniston, AL

$ 3.2 million Parkridge Credit Union in Chattanooga, TN

$ 704,403 Compton Municipal Employees Federal Credit Union, Compton, CA

$ 1.2 million Quemado Federal Credit Union, Quemado, TX

$ 355,315 Consolidated Public Safety Credit Union, Macon, GA

$ 3.4 million Northwest Baptist Federal Credit Union, Seattle, WA

This is just a sampling of the credit union mergers reported by the NCUA at the end of the 2015 third quarter. In total, there were 66 credit union mergers. The ten included in the list above had to make a move to remain solvent.

Why Larger Mergers Will Occur

What was revealing about large mergers in 2015 was the NCUA’s approval of 178 mergers in total, compared to a slightly higher number in the previous year (2014) with a total of 193. Sources do indicate that such mergers are anticipated to increase during 2016.

With that increase will come large cooperative mergers, like the one between $ 100 million United Health Services Credit Union in Spokane, Washington and $ 709 million Horizon Credit Union in Spokane Valley. Or the merger between $ 120 million Community Credit Union in La Crosse, Wisconsin with $ 727 million Verve Credit Union in Oshkosh. Also, don’t forget about $ 182 million Premier Credit Union in Palatine, Illinois. They merged with $ 678 million Consumers Cooperative Credit Union in Gurnee. More strategic mergers between larger entities will occur as they begin to recognize they can compete better together than apart. Economies of scale can be powerful when two large organizations come together to create a much larger combined entity.

What We Can Provide

Keep in mind, as mergers begin to take place, your forms will undoubtedly enter into the discussion. When it does, Oak Tree is the answer. We will customize your forms with new, credit union specific information, and will work with any vendor in the industry. We can seamlessly integrate our customized forms with any insurance provider or data processor, or other vendor. Additionally, all custom forms are compliant and up to date regarding state and federal guidelines. This will be extremely helpful should transition occur due to a merger event. We will handle the forms so you can focus on your members.

In addition, our forms are created with you in mind. They are designed to encourage a fast, efficient work flow, by ensuring our forms meet your technology objectives, designed specifically to your credit union’s policies and procedures. This is why Oak Tree is the industry leader for compliant forms.

Furthermore, we offer training and compliance support. We also have a marketing department that will work with you to develop loan programs for your specific membership. This could be very beneficial when membership fields expand after a merger. Let us help you reach your audience. If you ever have a question or concern, we are just a phone call, email or chat away. There can be a lot of uncertainty and issues that need to be dealt with during a merger, but forms should not be one of them.

As mergers increase, the number of credit unions is expected to shrink from 6,000 to somewhere around 4,100. If you are a current customer and anticipate a merger, don’t worry. Your forms can transfer with you – no change is required. This brings us full circle. That is the other thing we could say about change. When the industry changes, we respond, immediately! We are proud to have been serving our clients for over 30 years, and look forward to many more. Contact us at clientservices@oaktreebiz.com to find out how easy your merger can be.

Credit Union Mergers List History

Keep updated on what credit unions have merged. Comment on who you know has merged or is going to merge. Here are some past credit union mergers:

Cowlitz Credit Union, BlueOx Credit Union, Lower East Side People’s, Connexus Credit Union, Entertainment Industries Credit Union, Rockland Employees Credit Union, Del-One Credit Union, Clearview Credit Union, North Jersey Credit Union, Lancaster Red Rose Credit Union, Apple Credit Union, Destinations Credit Union, FRB Credit Union, Riverland Credit Union, Caddo Parish Teachers Credit Union, Louisiana USA Credit Union, Crane, Park Community Credit Union, Georgia United Credit Union, Natco Credit Union, WE Florida Financial Credit Union, Accentra Credit Union, CommunityAmerica Credit Union, SIU Credit Union, Great Lakes Credit Union, Hawaii Central Credit Union, Credit Union of Southern California, San Francisco Credit Union, Community Choice Credit Union, Hanscom Credit Union, U.P. State Credit Union, Boulevard, Summit Credit Union, Webster First Credit Union, Alcoa Pittsburgh Credit Union, Servco Credit Union, Lynchburg Municipal Employees Credit Union, The Southern Credit Union, Premier Credit Union, El Paso Area Teachers Credit Union, Great Lakes Credit Union, Boulder Valley Credit Union, Veridian Credit Union, Cornerstone Credit Union, Texas Telcom Credit Union, Texas Dow Employees Credit UnionPower Financial Credit Union and Ryder System FCU.

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