Credit Union Merger Approvals – November 2015

Similar to last month the NCUA approved 19 mergers in November 2015, which is down from the 22 mergers in October of last year.

The combined assets of merged credit unions is up nearly $50 million compared to last month.  For the month of November the total merged assets was $347 million compared to last year’s $435 million.  The mean and median assets of merged credit unions were $18.3 million and $6.2 million respectively.  In contrast, last month the mean assets were $15.5 million.

Large Credit Union Mergers

There were no acquisitions of credit unions with assets exceeding $100 million this month.

The largest merger was Wilmington, DE based Chestnut Run Federal Credit Union ($69M) merging into Louviers Federal Credit Union ($220M) also headquartered in Wilmington.  Chestnut Run FCU is well capitalized (10.5%) and has low delinquency (0.1%).  “Inability to obtain officials” was given as the reason for the merger.

Credit Union Merger Stats

The median size of acquiring credit unions is $211 million.  There are three credit union acquirers with assets exceeding $1 billion.

With $31 billion in assets State Employees Credit Union, based in Raleigh, NC was the largest acquiring credit union in November merging $15 million BCBSNC Credit Union.

Pentagon Federal Credit Union, located at the Alexandria, VA, with $18 billion in assets acquired Fort Gordon, GA based Fort Gordon and Community Credit Union, which has just over $63 million in assets.

The acquired credit unions on average represented 1% of the assets of the acquiring credit unions.

The nearest merger of equals was among Johnstown, PA based Healthcare First Credit Union ($59M) and Altoona, PA based Altoona Regional Health System Credit Union ($29M).

There are three credit unions with less than $1 million in assets being acquired.  The smallest credit union is Alloy Scottdale Credit Union based in Scottdale, PA with $226,000 in assets, which is being acquired by $216 million USX Credit Union headquartered in Cranberry Township, PA.

Reasons for Credit Union Mergers

When seeking regulatory approval credit unions are required to site the reason for the merger.  Of the 19 mergers in November, the following reasons were given:

• Expanded services: 12
• Lack of sponsor support: 3
• Lack of growth: 1
• Poor financial condition: 1
• Inability to obtain officials: 1
• Loss/declining field of membership: 1

Financial Performance of Acquired Credit Unions

The median net worth ratio of the merging credit unions is 11.9%. Only two credit unions had a net worth ratio below 7.0% and are considered under-capitalized.

The delinquent loans-to-total loans ratio averages 1.6%.

Only seven of the 19 of the merging credit unions reported positive earnings year to date.  The mean return-on-assets (ROA) is -1.2% and median -0.1% through September of this year.

Below is a chart of the NCUA merger approvals for November 2015: