Central Credit Union of Maryland could be set for growth early in the new year if the members of FIAFE Federal Credit Union vote to move forward with a merger.
FIAFE – short for Friendship International Airport Federal Employees –holds about $6.3 million of assets and serves 410 members, while Central has assets of nearly $43 million and serves more than 5,600. Both institutions are based in Baltimore.
The member will grow Central CU’s assets by nearly 15%, while expanding branch access for FIAFE members and expanding the products and services available to them, including online banking and loan applications, remote deposit capture, mortgage products and more.
FIAFE’s main office at Baltimore’s BWI Airport will close after the merger due to restricted access.
Three staff members at the merging credit union will receive bonuses totaling $57,000 after the deal closes.
FIAFE hold a net worth ratio of more than 33% but said in a letter to members it will not distribute a portion of its net worth because of “recent loan losses incurred, and the recent trend for the continuation of losses, together with the uncertain economic indicators related to the COVID-19 pandemic, and the numerous new and improved products and services that will be available to all members.”
Call report data from the National Credit Union Administration shows third-quarter earnings of more than $42,000 at FIAFE FCU, compared with losses approaching $322,000 during the same period last year. The losses in 2019 were primarily driven by more than $200,000 in charge-offs, largely concentrated in used car loans.
A vote on the deal is expected in early February.
