The current operating environment may be driving a growing number of credit unions to consider mergers.

That may be especially true for institutions below $10 billion in assets, which don’t benefit from the economies of scale as larger credit unions do.

“There is no joy below $10 billion,” a veteran M&A advisor told Tyfone. “I think you’re going to see more [M&A] because at every board meeting I’m doing they want to know about mergers,” he said.

Among the latest examples:

Launch Credit Union in Merritt Island, Florida, said it plans to merge with Community Credit Union of Florida in Rockledge.

The deal is as close to a true merger of equals as possible, as both institutions have roughly $1.4 billion of assets.

The transaction is expected to be finalized by the middle of 2025.

The resulting credit union would have more than 143,000 members with 22 branches throughout Brevard and Volusia counties.

“Our combined resources and shared commitment enable us to offer enhanced products and services to our members while maintaining the high level of personalized service our members have come to expect,” said Joe Mirachi, Launch CU’s president and CEO, in a press release.

Mirachi will continue as the combined credit union’s president and CEO, and Laurie Cappelli, Community Credit Union’s chief executive, will move forward with her planned retirement and serve as a consultant as needed through the system integration.

The M&A advisor said that in the past, credit unions wanted to discuss mergers but wouldn’t admit it. Now board members are talking more openly.

“And soon they are going to be happening with some frequency, and that’s going to become normal,” he said.

Part of the reason is that membership growth has been hard to come by for smaller institutions. For example, credit unions between $500 million and $1 billion of assets experienced a 7.4% membership decline in the second quarter, according to the National Credit Union Administration.

And an inordinate amount of the industry’s growth is coming through indirect lending rather than by new members walking through the credit unions’ doors.

Those relationships can be trickier to navigate.

The NCUA approved 46 mergers during the second quarter of 2024, up from the 26 in the first quarter and 36 in the second quarter of 2023.

Also, both Launch and Community have seen lower earnings of late.

Launch Credit Union earned roughly $3 million through the second quarter of 2024, a 31% decrease from a year earlier, according to call report data from the NCUA.

Community Credit Union earned $2.7 million in the first half of the year, a 61% decrease from the prior year.

“Our members will gain access to more than 20 branch locations. Together, we will build on our legacies of trust, integrity, and exceptional service to empower our members towards financial success.”

 – Laurie Cappelli
Chief Executive
Community Credit Union