KENNEBEC, Maine – More credit unions are expected to explore combining with banks and thrifts, in the same way KV FCU is seeking to merge into 138-year-old Kennebec Savings Bank.
Deals such as this will allow institutions with expertise in one area, for example consumer lending (KV FCU), to combine with institutions with expertise in another area, such as real estate lending (Kennebec Savings), said Alan Theriault, president of CUFinancial Services, the Portland, Maine, company that pioneered the credit union conversion to bank. “There are no credit unions in the market that can bring to the table what Kennebec Savings can,” Theriault told The Credit Union Journal yesterday.
So far, there is at least one other deal combining a credit union with a bank: Northeast Community CU, in Haverhill, Mass., which is merging into Haverhill Savings Bank.
Theriault, who has had a hand in almost all of the 39 credit union conversions to banks, said he is in talks with other credit unions about merging with a bank.
In the Kennebec deal, KV FCU plans to convert to a mutual savings bank at the same time Kennebec Savings will convert from a state to federally chartered savings bank. The two then would combine.
KV FCU is a $51 million credit union that reported $207,000 in net income for the first half of the year, a return-on-assets of about 0.73%. Kennebec Savings is a $640 million bank that reported a $2.7 million net for the first half, a similar ROA of just more than 0.70%.
