DURHAM, N.C.-Self-Help Credit Union has absorbed another troubled credit union via merger, its third in as many weeks, as it continues to expand in both its home state and in California.
Last week Self-Help, which uses a unique model involving both a state and federal charter, merged in Choice FCU, a troubled, $48-million CU in nearby Greensboro, N.C. It will operate as a division of Self-Help, becoming the fifth credit union in the state to do so.
Choice, chartered 30 years ago as Burlington Employees' FCU, lost $141,000 in 2008 and nearly $1 million in the first three quarters of 2009, and had just over 5% net worth as of Sept. 30.
A Good Opportunity
"The Choice merger was a good opportunity to merge with a good credit union serving working class families and combine the comparative strengths of both credit unions," Policy and Media Director David Beck told Credit Union Journal. "Choice has a great membership and retail services and Self-Help has the backroom strength and relative net worth to help Choice thrive."
Beck added that Self-Help has had a lending presence, but no branches, in Greensboro, where Choice FCU is headquartered.
Beck said there is no "master plan" to fully merge the acquired brands and that Self-Help would deal with each on a case-by-case basis.
"Many of the credit unions have created a strong local affinity that makes sense to maintain," he pointed out.
Unique Charter Situation
The Choice FCU deal highlights Self-Help's unique position in the credit union movement as it boasts both state and federal charters. It has used its federal charter as Self-Help FCU, created in July 2008, to merge in credit union in California. It has most recently failed El Futuro CU in Porterville and Kern Central CU in Bakersfield, helping to create a $150 million credit union less than 18 months after its founding.
"Self-Help Credit Union was founded as a North Carolina-chartered credit union and we want to maintain that history and strong working relationship we have with our state regulator," Beck said. "Self-Help also saw opportunity and need in California and in order to serve California families through a credit union the North Carolina charter was not sufficient. Having two charters has actually worked very well, allowing Self-Help to maintain strong focus on North Carolina while having a clear institutional commitment in California. Our credit unions have a lot of synergies, both present and future, that should make [the divisions] more efficient. We have a joint management team (Martin Eakes serve as CEO of both credit unions), a single human resources department [and] both credit unions have the same data platform hosted here in Durham."
Interestingly, while the $349.3-million Self-Help FCU is the largest community development credit union in the U.S., in the Golden State it operates nine of its 10 offices as Community Trust CU, and another, in Oakland, as People's CU.
Shared Resources, High Value
"Self-Help is one of many cases where shared resources have delivered high value for credit union members and the movement," Beck told the Journal. "In the case of our mergers, the merged credit unions continue to serve their members by working with a partner that shares their passion for serving working class members fairly and responsibly, while retaining their local identity and presence."
