Post Office Credit Union Members Vote to Merge With PenFed

Members of the $34.8 million Post Office Credit Union in Madison, Wis., voted in favor of merging with the $26.5 billion Pentagon Federal Credit Union in McLean, Va., on Monday.

PenFed President/CEO Jim Schenck said POCU members voted by an overwhelming majority for the consolidation. He declined to share how many members cast ballots and how many members voted for and against the merger.

“PenFed is especially excited to welcome members in the Madison area because it’s the heart of the credit union movement in the United States and one of our country’s great mid-western cities,” Schenck said in a prepared statement.

He also noted that the credit union industry will see an acceleration of mergers in 2021, particularly for credit unions with less than $500 million in assets impacted by the low-rate environment and the rising costs of compliance and cybersecurity.

“Scale matters in financial services in order to provide the products and services members want and to make the necessary investments to keep an institution safe and sound,” Schenck said.

Chartered in 1930, POCU’s seven employees served nearly 3,200 members.

According to POCU’s merger documents filed with the NCUA, all eligible POCU members will receive a one-time $200 capital distribution as a bonus dividend. This aggregate dividend for all eligible members will amount to approximately $640,000.

At the end of the third quarter, the credit union managed capital of $7.7 million.

PenFed also has agreed to donate $50,000 per year for five years to support charitable organizations and community events that are recommended by POCU’s board of directors, who will be serving in an unpaid advisory capacity following the consolidation.

PenFed said it will retain the POCU staff with three-year employment offers, except for President/CEO Kevin Yaeger and Vice President Tammie Stuntebeck.

Select employees, not identified in the POCU merger documents, will receive a retention bonus of up to 10% of their annual salary, which will not exceed $10,000 for any employee.

Yaeger was offered a five-year employment contract that will include a $13,000 increase in his annual salary from $112,000 to $125,000. If termination of employment by either party occurs within 18 months after the merger’s completion date, Yaeger’s total payout will be $437,500, according to POCU’s merger documents.

Stuntebeck was offered a three-year employment contract that comes with a $9,200 annual salary increase from $79,500 to $88,700. If termination of employment by either party occurs within 12 months after the merger’s completion date, her payout will be $177,400.