NCUA approved 9 mergers in February 2018 which decreased from 20 last month. The number of mergers are down and the combined assets of merged credit unions are down nearly $378M compared to last month. For the month of February, the total merged assets are down $120 million compared to last year’s $144 million. That’s a difference of $24 million. The mean and median assets of merged credit unions are $13.3 million and $8.1 million respectively.
There was not an acquisition of a credit union with assets exceeding $100 million this month.
The largest merger was Albany, NY based Health Employees Credit Union ($33M) merging into State Employees Credit Union ($3.5B) headquartered in Albany, NY. Health Employees Credit Union is Well capitalized (15.26% Net Worth), has low delinquency (0.68%) and is barely making money (0.10% ROA). “Expanded Services” was given as the reason for the merger.
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The median size of acquiring credit unions is $323 million. There are two credit union acquirers with assets exceeding $1 billion.
With $3.5 billion in assets, State Employees Credit Union was the largest acquiring credit union in February.
The other credit union with assets exceeding $1 billion included:
The acquired credit unions on average represent 2% the of the assets of the acquiring credit unions.
The nearest merger of equals is:
Floodwood, MN based Floodwood Area Credit Union ($19M) merging into Northwoods Credit Union ($91M) headquartered in Cloquet, MN. There is one credit union with less than $1 million in assets being acquired. The smallest credit union is Kit Tel Credit Union based Kittanning, PA with $817,526 in assets, which is being acquired by $15 million in assets Armstrong County Federal Employee Credit Union headquartered in Kittanning, PA.
When seeking regulatory approval credit unions are required to cite the reason for the merger. Of the 9 mergers in February, the following reasons were given:
The median net worth ratio of the merging credit unions is 15.26%. There are 2 credit unions that have a net worth ratio below 7.0%, which is considered under-capitalized.
The delinquent loans-to-total loans ratio averages 1.53%
Five of the nine of the merging credit unions reported positive earnings year to date. The mean return-on-assets (ROA) is -0.24% and median 0.10% for February of 2018.
Below is a chart of the NCUA merger approvals for February 2018:
