The NCUA approved 12 mergers in March 2015 which is down from the 22 mergers in March of last year.
The combined assets of the merged credit unions are $237 million. The mean and median assets of merged credit unions are $19.8 million and $12.2 million respectively. In contrast, last month the mean assets were $26 million.
There was one merger with a credit union exceeding $50 million in assets.
Farmington Hill, MI based Community Choice Credit Union ($532M) acquired Nupath Community Credit Union ($104M) located in Wyandotte, MI. Expanded services was cited as the reason for the merger. Nupath had good net worth (9.1% of assets) but a poor return on assets (-4.9%).
The median size of acquiring credit unions is $220 million. There were three credit union acquirers with assets exceeding $1 billion. With $2.7 billion in assets Virginia Credit Union, Inc., based in Richmond, VA was the largest acquiring credit union in March merging Sperry Marine CU. Waterloo-based Veridian CU, which is merging Cedar Falls, IA based Waterloo Police CU with $2.2 million in assets, was the second largest acquirer with $2.6 billion in assets.
The acquired credit unions on average represented only 3% of the assets of the acquiring credit unions. There was one merger where the relative size between the merged and continuing credit unions would be considered a merger of equals. In South Dakota, Rapid City Telco CU, with $44.2 million in assets, represented 72% of Sentinel CU’s $61.8 million assets.
Two credit unions with less than $1 million in assets are being acquired. The smallest credit union is Catasauqua Area CU based in Catasauqua, PA with $828,000 in assets, which is being acquired by $578.2 million First Commonwealth CU.
“Expanded services” continues to be the primary factor motivating these mergers. “Loss/Declining field of membership” was the reason for the merger sited by two of the credit unions. “Lack of sponsor support” was also cited as a reason for the merger.
The median net worth ratio of the merging credit unions is 8.8%. Two credit unions have net worth ratios below 7.0%.
The delinquent loans-to-total loans ratio averages 1.9%, which is primarily attributed to one credit union with delinquency ratios exceeding 10% of loans. This includes the 11% delinquency ratio reported by Catasauqua Area CU.
Only two of the 12 credit unions have positive earnings year to date. Consequently the mean return-on-assets (ROA) is -2.2% through March of this year.
Below is a chart of the NCUA merger approvals for March 2015:
