The trend of consolidation among local banks and credit unions continues, with the latest deal involving a small institution on the Southside and a larger peer to the east.
Spruance Cellophane Credit Union, a tiny outfit off Jefferson Davis Highway, is looking to merge into West Point-based Baylands Family Credit Union.
The merger, expected to close by the end of the first quarter, brings together two credits unions that trace back to longtime local industrial plants.
Spruance was created in 1953 to offer membership to employees of the Dupont Spruance Plant 5401 Jefferson Davis Highway, which manufactures Kevlar and other material.
Today it has around $5.5 million in total assets and just shy of 900 members.
It will join Baylands, which was founded in 1946 to serve employees of the paper mill in West Point, owned then by Chesapeake Corp. and today by West Rock. It has $73 million in total assets and 5,400 members.
Spruance CEO Dottie Conwell, who has been with the credit union for more than three decades, said it didn’t have much choice but to find a merger partner.
“We need to survive, we need to grow and we needed to join forces in order to do that,” Conwell said. “We are less than a $6 million credit union and that is rare these days.”
Baylands CEO Christopher Burgess said the consolidation trend – several smaller local credit unions made similar deals in the last two years – is rooted in difficulties keeping up with regulations.
“The driving force for all of that is the regulatory environment,” Burgess said. “More and more compliance, particularly since the recession. And for some of the smaller credit unions like Spruance, they just can’t keep up with all that stuff.”
Burgess said the deal gives his organization the chance to pick up Spruance’s members and its branch in Chesterfield County. That will add to its three branches in West Point, Norge and Bottoms Bridge, as well as Spruance’s three employees.
“It adds territory, it adds another branch,” he said. “It’s growth for us.”
Burgess said his credit union became known as Baylands Federal Credit Union around 2000 and then changed to a state charter, prompting a name change to drop “federal” in favor of “family.”
That charter change allows the organization to complete small mergers, which help it expand its territory of eight counties: King William, King and Queen, New Kent, James City, Essex, Middlesex, Matthews and Gloucester.
Such change is vital even for credit unions of Baylands’ size, he said.
“For the not-so-small credit unions – Baylands is considered mid-sized – our strategy is that we want to grow so that we don’t end up like the small ones in 10 years.”
Conwell said the Spruance credit union’s growth has stagnated, down from a peak of more than 2,500 members. That’s due in part to fewer employees at the plant and inability to attract and retain family members as a new generation of customers, she said.
Conwell steered the credit union into a community charter in 2013, allowing it to branch out and offer membership to anyone in Chesterfield County.
She said Spruance was a little late with that strategy, as several other local credit unions transitioned to community charters. That includes its next-door neighbor, the former Bellwood FCU, which was absorbed by Henrico FCU in 2012.
Just up the street at the same Dupont site where Spruance started, Argent Credit Union has a presence and a community charter.
The Spruance/Baylands marriage still needs approval from regulators and members.
Among the other recent local credit union mergers was Virginia Boxer FCU, a tiny Lakeside-based institution that merged with Connects FCU last year.
Henrico FCU followed its Bellwood deal by absorbing the much smaller Nabisco Employees Credit Union in early 2017.
And Richmond-based Entrust Financial Credit Union, which is headquartered on Dabney Road and offers membership to churches and Christian organizations in the area, is merging with Christian Community Credit Union from California.