NCUA approved 8 mergers in March 2017 which decreased from 14 last month. The number of mergers are down and the combined assets of merged credit unions are up nearly $ 24M compared to last month. For the month of March, the total merged assets are markedly down to $168 million compared to last year’s $371 million. That’s a difference of $203 million. The mean and median assets of merged credit unions are $20.9 million and $8.8 million respectively.
There was one acquisition of a credit union with assets exceeding $100 million this month.
The largest merger was Green Bay, WI based Harbor Credit Union ($110M) merging into Fox Communities Credit Union ($1.3B) headquartered in Appleton, WI. Harbor Credit Union is well capitalized (9.57% Net Worth), has low delinquency (0.35%) and is moderately profitable (.32% ROA). “Expanded Services” was given as the reason for the merger.
The median size of acquiring credit unions is $381 million. There are 3 credit union acquirers with assets exceeding $1 billion.
With $1.8 billion in assets American Heritage Credit Union, was the largest acquiring credit union in March.
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:
There are two credit unions with less than $1 million in assets being acquired. The smallest credit union is First Baptist Church of Darby Credit Union based in Pleasant Darby, PA with $71,943 in assets, which is being acquired by $1.8 billion in assets American Heritage Credit Union headquartered in Philadelphia, PA.
When seeking regulatory approval credit unions are required to cite the reason for the merger. Of the 8 mergers in March, the following reasons were given:
The median net worth ratio of the merging credit unions is 15.6%. One credit union has a net worth ratio below 7.0% and is considered under-capitalized.
The delinquent loans-to-total loans ratio averages 1.8%
Three of the 8 of the merging credit unions reported positive earnings year to date. The mean return-on-assets (ROA) is -0.65% and median -0.28% for March of 2017.
Below is a chart of the NCUA merger approvals for March 2017:
