With the arrival of spring comes credit union mating season.
Two local credit unions joined forces last week in a merger that will add $18 million in assets to the surviving institution and give it a presence on both sides of the river as it looks to expand.
Resources Federal Credit Union, whose members are employees of local Fortune 500 company Genworth Financial, was merged into Petersburg-based Peoples Advantage Federal Credit Union. The deal went into effect May 1.
The Peoples Advantage brand will remain, as will its broad charter that allows it to offer membership to essentially anyone in the Richmond metro area.
Patsy Smith, who had been chief executive of Resources FCU, is staying on as CEO of the combined institutions. Audrey Bollinger, who had been Peoples Advantage’s CEO before the merger, retired April 30, Smith said.
With the addition of Resources’ 1,700 members, Peoples Advantage will have nearly 10,000 members. Earlier this year, it received approval from the National Credit Union Administration for a metropolitan statistical area charter allowing it to offer membership to anyone in the Richmond region.
“Ultimately, of course, the idea is to grow it over there (north of the James River) and to strategically place ourselves throughout the MSA,” Smith said.
The merged credit unions will have combined assets of $72 million and four branches – Peoples Advantage locations in Petersburg, Chester and Colonial Heights, and the Resources branch on Genworth’s massive corporate campus off West Broad Street in Henrico County.
Joining forces with a larger institution allows Resources to offer more services, such as various loan products, to its members than it could on its own, Smith said. The merger also helps the smaller institution better deal with rising regulatory costs
“A big part of the motivation was regulatory requirements and the costs to handle that,” said Smith. “This opens up so many more opportunities for my members.”
As has been the case in the banking industry in recent years, smaller credit unions have sought larger merger partners in the face of rising costs and tighter margins.
At least half a dozen local credit unions have come together through mergers since 2012.