The members of First Credit Union of Scranton will vote next month on a proposal to merge it into Penn East Federal Credit Union.
Both institutions are headquartered in Scranton, Pa.
A merger announcement from the $20 million-asset First Credit Union indicated that the pressures from the last year were a major factor in the decision to seek a merger partner.
“The pandemic has lowered our [return on assets] and net worth, economies of scale favor a larger credit union, an increasing regulatory burden make continuing operations difficult, and demand for new products and services cannot be met by a small credit union,” a notice signed by James Snyder, president of the credit union’s board of directors, said.
The deal will provide the former FCUS members with better deposit rates, additional office hours, a wider branch network, drive-through services and more.
First Credit Union of Scranton CEO Jamie Masters and another employee will also receive raises from the merger totaling more than $60,000.
FCUS finished 2020 with a loss of more than $112,000, following earnings of more than $35,000 during 2019, as lending contracted and income from loans and other sources declined.
First Credit Union of Scranton serves about 2,000 members and holds assets of just over $20 million, while Penn East has over 22,000 members and assets exceeding $206 million.
