Boston Credit Union to Expand With Two Mergers

The City of Boston Credit Union announced plans to acquire two small federal credit unions in the area in January, increasing its assets by 12% and its members by 16%.

Members of the City of Boston Credit Union ($395 million in assets, 26,237 members) on Tuesday approved the mergers involving Boston-based Northeastern University Federal Credit Union ($22.7 million in assets, 2,180 members) and Chadwick Federal Credit Union ($22.9 million in assets, 2,032 members) based in Norwood, Mass., about 16 miles southwest of Boston.

Both have lost members and assets in the past year. As of Sept. 30, Chadwick’s assets have fallen 3% from a year earlier, and membership has fallen about 5%. Northeastern University FCU’s assets fell 11%, and its membership fell about 8%.

Chadwick’s return on average assets for the first nine months of 2018 was an annualized 0.21%, up 13 basis points, while Northeastern University FCU’s ROA was 0.88%, up 46 basis points.

City of Boston CU, on the other hand, has seen its assets and membership grow about 5% in the past 12 months. Its ROA was 0.35% for the first nine months of 2018, up 14 basis points.

The 103-year-old credit union is further poised for growth because of the approval it received earlier this year to serve the 1.6 million residents in Middlesex County northwest of Boston. The credit union’s field of membership previously was Suffolk County, which had a 2016 population of 784,000 and includes Boston, and Norfolk County, which had a 2010 population of 671,000.

A news release from the credit union said the mergers and geographic expansion support its long-term growth strategy “to build a competitive advantage in keeping up with emerging technologies and offering attractive rates and lower fees to its members.”

As of June 30, Massachusetts had 164 federally-insured credit unions, which had $39.2 billion in assets and three million members. City of Boston CU was the state’s 29th largest based on assets behind Crescent Credit Union of Brockton with its $431.9 million in assets.

Combining the third-quarter levels of the three credit unions, City of Boston CU would have $440.6 million in assets and 30,449 members after the mergers.

City of Boston CU’s merger plans follow member votes in Massachusetts last month approving a plan by the $616 million Merrimack Valley Credit Union in Lawrence ($614.2 million in assets, 49,703 members) to acquire the $382 million Bridgewater Credit Union in Bridgewater ($380.2 million in assets, 31,841 members), creating the state’s eighth-largest credit union.

“As the number of credit unions in Massachusetts continues to shrink, City of Boston Credit Union membership continues to grow, providing the capital and resources required for long-term success – both for the City of Boston Credit Union and its members who share in its ownership,” the news release said.

The mergers are anticipated to take effect Jan. 1, and will bring City of Boston CU’s footprint to include eight branch locations and 90 employees. Both mergers require approval from Chadwick and Northeastern University FCU members. Regulatory approvals must also be received from the NCUA, the Massachusetts Division of Banks and the Massachusetts Credit Union Share Insurance Corporation.