PenFed set to absorb midsize Long Island credit union
One of the nation’s largest credit unions is about to get bigger.
Members of the $278 million-asset Sperry Associates Federal Credit Union in Garden City Park, N.Y., are set to vote on a merger that would see them become part of Pentagon FCU in McLean, Va. PenFed holds approximately $26 billion in assets and was the third-largest credit union in the country at the end of March, according to data from the National Credit Union Administration.
A message from Sperry Associates Chairman Gary Barello noted that the deal will give members access to a wider range of products and services in branches and online. All eligible members will also receive a $350 special merger dividend totaling about $5.7 million if the transaction is approved.
The notice to Sperry Associates members said that because of a changing financial services marketplace on Long Island, including the presence of big banks and fintechs, it has “become more challenging for mid-sized institutions like Sperry to thrive. While Sperry is currently financially healthy and well-capitalized, our board of directors felt that partnering with PenFed is the best option to ensure that our membership gets the service they both expect and deserve — all while continuing the credit union mission of people helping people.”
Barello said PenFed was selected as a merger partner because both institutions have roots in the defense sector and PenFed “offered the most comprehensive benefits to our membership and employees.”
All SAFCU staffers who are not offered a position at PenFed will receive one year’s worth of pay as a severance package. Several members of the executive team there have been given two- to five-year guarantees of employment at PenFed.
“In our board’s estimation, such a merger would ensure a continuance of the service that our members have come to expect from Sperry, and ensure that our credit union’s legacy continues in the years to come,” Barello wrote. “While Sperry is experiencing strong financial performance and health, the board felt that this measure is the best action to take in a hyper-competitive market for the sake of our members and our employees.”
A special member meeting to announce the results of the vote will be held Sept. 30. If approved, the deal is expected to close by the end of this year.
Sperry Associates FCU earned about $256,000 during the first half of this year, a 53% decline from the first half of 2019.