NCUA approved 18 mergers in December 2016 which stayed the same from 18 last month. The difference is that there is one credit union, Indianhead, that merged 4 tiny credit unions this month.
The number of mergers are the same however the combined assets of merged credit unions are up nearly $ 1.2B compared to last month. For the month of December, the total merged assets are markedly up to $1.6 billion compared to last year’s $673 million. That’s an increase of $974 million. The mean and median assets of merged credit unions are $91.5 million and $3.6 million respectively.
There were 3 acquisitions of credit unions with assets exceeding $100 million this month.
The largest merger was San Diego, CA based North Island Financial Credit Union ($1.2B) merging into California Credit Union ($1.6B) headquartered in Glendale, CA. North Island Financial Credit Union is well capitalized (11.3% Net Worth), has low delinquency (0.4%) and is profitable (0.8% ROA). “Expanded Services” was given as the reason for the merger.
The median size of acquiring credit unions is $98 million. There are 4 credit union acquirers with assets exceeding $1 billion.
With $20.7 billion in assets Pentagon Credit Union, was the largest acquiring credit union in December.
Other credit union with assets exceeding $1 billion included:
The acquired credit unions on average represent 3% the of the assets of the acquiring credit unions.
The nearest merger of equals is San Diego, CA based North Island Financial Credit Union ($1.2B) and California Credit Union ($1.6B) headquartered in Glendale, CA.
There are 3 credit unions with less than $1 million in assets being acquired. The smallest credit union is Catholic Credit Union based in Superior, WI with $ 833,647in assets, which is being acquired by $46 million in assets Indianhead Credit Union headquartered in Spooner, WI.
Indianhead Credit Union was approved for mergers with four credit unions this period, all based in Superior, WI:
When seeking regulatory approval credit unions are required to cite the reason for the merger. Of the 18 mergers in December, the following reasons were given:
The median net worth ratio of the merging credit unions is 15.0%. Three credit unions have a net worth ratio below 7.0% and are considered under-capitalized.
The delinquent loans-to-total loans ratio averages 1.1%
Ten of the 18 of the merging credit unions reported positive earnings year to date. The mean return-on-assets (ROA) is -1.3% and median -0.01% for December of 2016.
Below is a chart of the NCUA merger approvals for December 2016:
