Nagy called Polish National with 18,000 members and six branches “one of the healthiest financial institutions in the Commonwealth.”

Valleystone, which lost $244,000 in 2011 and $71,000 the year before, does retain 20% net worth.

The proposed merger is subject to approval of Valleystone members May 1 and of the Massachusetts Division of Banks.

Valleystone members have been meeting in a series of town hall sessions in April with a final one slated on Wednesday in VSCU offices.

Nagy said that as a result of the merger Valleystone members will be afforded “cutting edge technology, 24/7 phone, online and mobile banking technology and a sophisticated array of financial products to rival any of the big banks.”

In hailing the benefits of a merger, Nagy candidly cited the internal problems of a smaller credit union dealing with a graying membership.

“Valleystone's members are on average older than the region's population at large,” wrote Nagy. “Being older, they are net savers instead of borrowers. All their borrowing is done. They aren't buying homes. They aren't getting as many new-car loans.”

Thus “we need to make those loans to make money and we don't have the marketing budget to be able to compete with some of the larger community banks.” Meanwhile, regulatory costs are also growing, he said. “Laws including the federal Dodd Frank financial reform bill must be complied with and that requires staff time. To thrive, a financial institution has to spread that cost out over as many customers, members in the case of credit unions, as possible,” Nagy concluded.