Merger adds to PenFed's expansion moves

Members of McGraw Hill Federal Credit Union approved a proposal on Monday to merge the institution into Pentagon Federal Credit Union.

In a letter to members, Michael Sullivan, president and CEO of MHFCU, said the merger is expected to close on May 1.

Based in East Windsor, N.J., McGraw-Hill FCU has about $426 million in assets. The $24.5 billion-asset PenFed is based in McLean, Va.

Sullivan noted that PenFed will continue to operate MHFCU’s two existing branches – one in East Windsor, N.J., and the other in New York City – and plans to add another Manhattan branch this summer.

This is the latest growth move for PenFed following several months of high-profile activity.

In early January, PenFed announced an “emergency merger” with the troubled Progressive Credit Union. That particular merger granted PenFed an open charter, allowing anyone nationwide to join the institution, sparking criticism from banking groups. The credit union subsequently announced plans to open a new facility in San Antonio, Texas.

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Based in East Windsor, N.J., the $426 million-asset MHFCU posted net income of about $46,400 in 2018, after recording a net loss of about $170,300 in the prior year.

Meanwhile, PenFed posted net income of about $156 million in 2018, a 12.6 percent decline from the prior year.