Two Lansing, Mich.-based credit unions, LAFCU and Lansing Postal Community Credit Union, jointly announced that their boards intend to merge the two credit unions.
The merger, which has already received approvals from the Michigan state regulator and the National Credit Union Administration, will now be subject to approval by LPCCU members at a vote scheduled for March 14.
According to the Michigan Department of Insurance and Financial Services, the transaction will be structured as merger of the $22 million-asset LPCCU into the $640 million LAFCU.
Pending such approval, the merger is slated to close on or after April 1.
The combined entity will have about 63,000 members, ten branches in Ingham, Clinton, Eaton and Shiawassee counties and 25 ATMs, along with access to nearly 30,000 surcharge-free ATMs in the CO-OP ATM network and 5,000 CO-OP Shared Branches across the country.
LPCCU’s branch at 4600 Collins Road in Lansing will remain open and no jobs are expected to be lost as a result of the transaction, the parties stated.
The merger will result in “an even better credit union for our members,” said Jason Smith, LPCCU CEO and general manager.
LAFCU’s CEO Patrick Spyke said combining the two CUs will bring together two “strong, financially sound credit unions.”
In pursuing the merger, Smith cited challenges faced by LPCCU due to the consolidation of postal services from Lansing to other locations in Michigan, which has led to a “significant decrease” in the number of U.S. Postal Service employees at the Collins Road facility. Given that LPCCU’s main source of membership comes from the USPS, the decrease in the number of employees has had an “adverse effect” on LPCCU’s ability to grow.
Indeed, according to call reports, membership at LPCCU moved downward to 2,768 at year-end 2017 from 2,839 at year-end 2016. Over that time, LPCCU’s net income dropped from about $33,500 in 2016 to about $14,800 last year.
Meanwhile, LAFCU generated net income of about $3 million in 2017, up from $2.6 million in the prior year.