The pace of credit union mergers is picking up, rising from 25 in the second quarter to 34 in the third quarter for a total of 93 mergers so far in 2020, according to new analysis from CEO Advisory Group.
The combined assets of all merged credit unions was $1.5 billion in the third quarter, compared to $1.3 billion a year ago for the same period a year earlier and $777 million in the second quarter, the firm reported. Continuing credit unions had total assets of over $50 billion, but that figure is skewed by the inclusion of a deal involving $25 billion-asset Pentagon Federal Credit Union.
PenFed is one of six CUs above $1 billion to be involved in mergers during the third quarter, and its acquisition of $273 million-asset Sperry Associates FCU in Long Island is the largest deal of the quarter. The next largest was Numark’s acquisition of $205 million-asset Northstar CU.
Of the 34 mergers in the third quarter, the vast majority (29) cited expanded services as the reason behind their merger, while four pointed to poor financial condition and just one noted a declining field of membership. Seven were under-capitalized by NCUA’s net worth ratio standards, and 16 had negative earnings year-to-date.
Only four of the institutions being absorbed were headquartered west of the Rocky Mountains.
