NCUA Approved Credit Union Mergers - April 2017

Credit Union Merger Approvals – April 2017

NCUA approved 11 mergers in April 2017 which increased from 8 last month. The number of mergers are up and the combined assets of merged credit unions are up nearly $ 129M compared to last month.  For the month of April, the total merged assets are down to $297 million compared to last year’s $345 million. That’s a difference of $48 million. The mean and median assets of merged credit unions are $27 million and $10.6 million respectively.

Large Credit Union Mergers

There was one acquisition of a credit union with assets exceeding $100 million this month.

The largest merger was Jericho, NY based Northwell Health Credit Union ($114M) merging into Bethpage Credit Union ($6.9B) headquartered in Bethpage, NY.  Harbor Credit Union is well capitalized (11.13% Net Worth), has high delinquency (6.63%) and moderate profitability (0.46% ROA).  “Expanded Services” was given as the reason for the merger.

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Credit Union Merger Stats

The median size of acquiring credit unions is $582 million.  There is one credit union acquirer with assets exceeding $1 billion.

With $6.9 billion in assets, Bethpage Credit Union was the largest acquiring credit union in April.

The acquired credit unions on average represent 3% the of the assets of the acquiring credit unions.  The nearest merger of equals was between Lubbock, TX based Lubbock Teachers Credit Union ($18.1M) with 14% of the assets of Texas Tech Credit Union ($130.7M) headquartered in Lubbock, TX.

There are 2 credit unions with less than $1 million in assets being acquired.  The smallest credit union is Arlington Hotel Credit Union based in Arlington Hotel, AR with $132,625 in assets, which is being acquired by $70.7 million in assets Diamond Lakes Credit Union headquartered in Malvern, AR.

Reasons for Credit Union Mergers

When seeking regulatory approval credit unions are required to cite the reason for the merger.  Of the 11 mergers in April, the following reasons were given:

  • Expanded services: 9
  • Poor Financial Condition: 2

Financial Performance of Acquired Credit Unions

The median net worth ratio of the merging credit unions is 11.2%. One credit union has a net worth ratio below 7.0% and is considered under-capitalized.

The delinquent loans-to-total loans ratio averages 6%

Seven of the 11 of the merging credit unions reported positive earnings year to date.  The mean return-on-assets (ROA) is -1.12% and median 0.02% for April of 2017.

Below is a chart of the NCUA merger approvals for April 2017:Credit Union Mergers - April 2017