Massachusetts credit unions go for take two on merger

Bridgewater Credit Union in Massachusetts will try again to merge into Merrimack Valley Credit Union in Lawrence, Mass.

The merger would create an almost $1 billion-asset institution with more than 80,000 members.

The two institutions initially announced a planned merger earlier this year but that attempt was scuttled after a federal court ruling. In March, a federal judge invalidated a provision of the National Credit Union Administration’s field of membership rule that automatically qualifies a combined statistical area with fewer than 2.5 million people as a “local community” and the increase to 1 million people as the population limit for rural districts for federally chartered credit unions.

The $617 million-asset Merrimack Valley was a federally chartered credit union but it converted to a state charter in September. A notice on Bridgewater’s website explained that under federal charter guidelines, it would have had to remove Barnstable County from its field of membership and that they would no longer have Massachusetts Credit Union Share Insurance Corporation Excess Deposit Insurance.

But under a state charter, they would be able to keep Barnstable County in their field of membership and all deposits in excess of $250,000 would be insured by MSIC.

Under terms of the merger, Bridgewater’s current president and CEO, John J. Howard, will keep those titles once the transaction is completed. Merrimack Valley current president and CEO, Peter Matthews Jr., will retire upon completion of the merger.

The merger will not result in any staff layoffs or branch closings, according to a letter to Bridgewater members earlier this month. The merger is expected to close in early 2019, pending regulatory approvals.

According to a notice on Merrimack Valley’s website, the combined organization will use the Merrimack Valley name in the northern part of its footprint. It will then operate as Bridgewater Credit Union, a division of Merrimack Valley Credit Union, in the southern portion. Merrimack Valley Credit Union’s corporate office in Lawrence will be the headquarters for the combined organization.

Members of the $382 million-asset Bridgewater CU will vote on the proposed merger at a special meeting on Oct. 29.

Bridgewater posted net income of about $245,000 in the first half of 2018, more than three times the $71,000 it generated in the same period last year.

Merrimack Valley earned $2.3 million in the first half of 2018, up about 10 percent from the first half of 2017.