Another small Connecticut credit union plans to merge into a larger organization, as technology and an aging membership continue to challenge the industry.
Greater Watertown Federal Credit Union plans to merge into Waterbury-based FD Community Federal Credit Union in a deal expected to close this summer. The credit unions’ federal regulator, the National Credit Union Administration, has approved the merger.
In a letter to members, GWFCU’s board of directors said several factors drove the decision to pursue a merger, including the challenges faced by a small institution. GWFCU has about $19 million in total assets and 2,700 members, according to NCUA data.
“Our size does not lend itself to the economies of scale necessary to offer competitive pricing of our products,” the board of directors said in its letter. “Since much of our membership is beyond their prime borrowing years, we are unable to generate sufficient loan income to pay competitive dividend rates. And, we are unable to offer emerging technologies to improve our remote interactions with our membership.”
FD Community has about $110 million in assets and 9,600 members. In a separate letter to FD Community members, President and CEO David Sacco and Chairman Joseph Del Buono said the merger would bring greater value and convenience to the combined membership.
“Looking ahead, the combined deposits and capital base that will result from this partnership will give us added resources to offer even greater levels of member service, explore greater access to new technologies, as well as begin offering new products and services,” Sacco and Del Buono said.
Sacco will lead the combined organization, which will keep the FD Community name. FD Community’s two branches in Waterbury and GWFCU’s Watertown branch will be retained.
Greater Watertown’s membership will vote on the proposed merger at a special meeting on April 12, with members able to vote in advance. If the merger is approved, the combined field of membership would include people who live, work, worship or attend school in Waterbury, Naugatuck, Cheshire, Watertown, Wolcott, Plymouth, Prospect, Oakville, Thomaston or Middlebury. Businesses and other legal entities in those towns will also be eligible for membership.
Several other small Connecticut credit unions have also sought mergers in the past year. East Hartford-based America’s First Network Credit Union completed three mergers with smaller credit unions in 2020 and 2021, including Groton Municipal Employees Federal Credit Union in February and Connecticut Transit Federal Credit Union and Connecticut Federal Credit Union last year. A small employer-based credit union in Bethel, Consolidated Controls Corp. Federal Credit Union, has proposed merging into Shelton-based Mutual Security Credit Union.
In the letter to members, GWFCU’s board of directors said credit union members had remained loyal despite the organization’s shortcomings.
“We feel this loyalty is due, in large part, to the personal, friendly service we have been able to provide to our members,” the board said. “As we considered a merger partner we looked for a local credit union that could bring our members the things we have been unable to provide, along with providing the excellent service they have come to expect.”
