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Consolidation of credit unions continues | Credit union hours

The drumbeat of consolidation in the credit union industry continues.

So far in 2021, there have been 39 mergers in the second quarter and 31 in the first quarter. That total of 70 in the first six months of the year is down by one from the same point in 2020. In the latest one-year figures – from June 2020 to June 2021 – there were 135 mergers. .

In 1985, there were nearly 18,000 banks and savings banks in America and about 15,000 credit unions. As of June 30, 2021, there were 5,005 and 5,136, respectively.

It’s also worth noting that even eliminating edge mergers over $ 1 billion, 2021 saw by far the largest average merger size of any previous year.

Let’s dig a little deeper into the current numbers, thanks to the Peer-to-Peer database that we maintain at Callahan & Associates.

A look at the aggregate figures

In terms of total assets, the second quarter of this year saw many more mergers than the first quarter of the year: $ 2.4 billion versus $ 1.3 billion, or 78.5% more . For the first half of the year, total merged assets increased 13.7% from the first half of 2021 to $ 3.7 billion from $ 3.3 billion. In one-year figures, $ 7.2 billion in member assets were merged with other co-ops from June 2020 to June 2021.

Based on average asset size, the average was $ 61.3 million for merged credit unions in the second quarter of 2021, up 41.9% from the average size of $ 43.2 million in the first quarter of 2021. Average assets of merged credit unions in the first half of the year were $ 53.3 million, down 22.4% from the average $ 68.7 million in the first half of the year. first half of 2020 – although the average value for 2020 was skewed up by a large merger of $ 2.2 billion.

The largest and most numerous mergers by state and credit union

By state, Ohio had the most mergers in the last 12 months from June 2020 to June 2021 at age 14, followed by New York at 11, Illinois at 10, Pennsylvania at six and five each for California and Virginia. Only 11 states did not have a credit union acquired by another during this period.

Here are the five biggest mergers from the second quarter of this year:

  • Xceed Financial Credit Union ($ 981.8 million, California) merged with Kinecta Federal Credit Union ($ 5.4 billion, Manhattan Beach, California)
  • Infinity Federal Credit Union ($ 336.3 million, Westbrook, Maine) merged with Deere Employees Credit Union ($ 1.4 billion, Moline, Illinois)
  • Premier Federal Credit Union ($ 251.6 million, Greensboro, NC) merged with Charlotte Metro Credit Union ($ 798.9 million, Charlotte, NC)
  • Aspire Federal Credit Union ($ 141.6 million, Clark, NJ) merged with Pentagon Federal Credit Union ($ 27.3 billion, McLean, Virginia)
  • Leyden Credit Union ($ 100.6 million, Franklin Park, Ill.) Merged with Partnership Financial Credit Union ($ 248.4 million, Morton Grove, Ill.)

Here are the top five of the first trimester:

  • Columbus Metro Federal Credit Union ($ 259 million, Columbus, Ohio) merged with Telhio Credit Union ($ 951.8 million, Columbus, Ohio)
  • NorthStar Credit Union ($ 211.8 million, Warrenville, Ill.) Merged with NuMark Credit Union ($ 332.6 million, Joliet, Ill.)
  • Lower Valley Credit Union ($ 128.4 million, Sunnyside, Washington) merged with Self-Help Credit Union ($ 1.5 billion, Durham, NC)
  • Riverset Credit Union ($ 117.6 million, Pittsburgh, PA) merged with Allegent Community Federal Credit Union ($ 151.7 million, Pittsburgh, PA)
  • Anderson Federal Credit Union ($ 107.5 million, Anderson, SC) merged with Spero Financial Credit Union ($ 543.0 million, Greenville, SC)

No credit union has acquired more than one other credit union in the first half of 2021, but if you extend this period by one year (June 2020 to June 2021), PenFed has acquired three credit unions totaling 441 , $ 7 million in assets, and 11 more merged two smaller ones. credit unions in their cooperatives.

A five-year retrospective

Over the past five years – from June 2016 to June 2021 – there have been 852 credit union mergers, an average of 170 mergers per year. A total of $ 32.2 billion in assets were consolidated in another credit union during this period.

The average size of each acquisition was $ 37.8 million in assets. Five credit unions with over $ 1 billion in assets have merged into a larger credit union (a ‘super merger’) in the past five years, the largest of which was Schools Financial Credit Union (2, $ 2 billion, Sacramento), which merged with SchoolsFirst Federal Credit Union ($ 16.8 billion, Santa Ana, Calif.) In the first quarter of 2020.

Meanwhile, five mergers in the past five years were “reverse mergers,” where the surviving credit union had fewer assets than the credit union it acquired.

In the past five years, Pennsylvania has had the most mergers with 70, followed by Ohio (58), California and New York (54) and Illinois (50). Every state has had at least one merger during this period.

PenFed also recorded the highest number of mergers in the past five years, acquiring 16 small co-ops with a total of $ 2.2 billion in assets. American Heritage Credit Union ($ 3.6 billion, Philadelphia) and Nuvision Federal Credit Union ($ 2.8 billion, Huntington Beach, Calif.) Held seven assets totaling $ 56 million and $ 785.3 million respectively. active. Superior Credit Union ($ 1.4 billion, Lima, Ohio) and Peach State Credit Union ($ 737.1 million, Lawrenceville, Georgia) recorded six each with total assets of $ 206 million and 113.2 million dollars, respectively.

Bank acquisitions

Apart from acquiring other credit unions, some credit unions have moved into the banking space, acquiring either an entire bank or a handful of bank branches. A credit-bank cooperative transaction occurred 14 times between June 2020 and June 2021. Four of these were branch acquisitions and the remaining 10 were full bank acquisitions.

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go hunt Industry analyst Callahan & Associates Washington DC.

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