HAVERHILL, Mass.-NCUA said last week it finally gave its approval to the unusual merger of Northeast Community CU into Haverhill Savings Bank, the first credit union combination with a bank in Massachusetts.
NCUA approval-18 months after the deal was first proposed-comes after both members of the credit union and depositors in the savings bank narrowly OKd the merger.
The delay was caused by uncertainties in NCUA's regulations covering the unusual merger of a credit union into a bank, attempted only a handful of times before. At first, the two institutions tried to complete the combination under normal merger rules.
But NCUA, which had authority over the state-chartered credit union by virtue of its federal deposit insurance, insisted that the merger be treated as if the credit union were converting to a bank, requiring Northeast to complete the comprehensive conversion requirements.
Industry observers see the unusual combination as a possible model for deals to come, as more and more financial institutions seek to rationalize resources in these trying times.
If any combination of a bank and credit union made sense, this one did, as the two mutually owned financial institutions were not only neighbors, but also shared the same depositors.
The merger will combine two narrowly profitable institutions within blocks of each other in this hard scrabble community a half hour north of Boston to form a savings bank with $260 million in assets.
Thomas Faulkner, president of Haverhill Savings Bank, will be CEO of the new financial institution, while Peter DiBenedetto, president of Northeast, will serve as president and chief operating officer.
