Proposed Merger Would Create Fourth Largest New York Credit Union

Capital Communications Federal Credit Union (CAP COM) said Thursday it plans to merge with State Employees Federal Credit Union, which would create New York’s fourth largest financial cooperative by assets and second largest by members.

In a joint statement, the boards of directors for each Albany-based credit union unanimously voted on Thursday to approve what they described as a “merger of equals” that is “subject to the standard due diligence review commensurate with a transaction of this size and complexity.”

If all goes well with the due diligence process, the consolidation also will require an affirmative vote from CAP COM members and approvals from state and federal regulators.

If all of those conditions are met, the merger is expected to become effective next year.

With their agreement to merge, the boards have decided that SEFCU President/CEO Michael Castellana will serve as the new organization’s CEO and CAP COM President/CEO Chris McKenna will be its president.

“We plan to apply the ‘best of both worlds’ principle in everything we do as we integrate our approach to supporting employees, members and the community,” Castellana said. “We are also excited about advancing our purpose-driven mission in new and exciting ways from expanding and enhancing our products, services and support for our members, to offering deeper, more meaningful financial and volunteer contributions to nonprofit organizations.”

The credit unions have agreed to create an entirely new entity and brand, which will include a new name and logo.

“We are excited to explore this potential opportunity to become stronger together,” McKenna said. “As like-minded, mission-driven credit unions who share a commitment to our employees, members and community, this represents an exciting possibility to continue to expand our award-winning service to members across New York State, while continuing to invest in technology that makes banking more convenient.”

Merging the $2.5 billion CAP COM and its 144,368 members with the $5.3 billion SEFCU and its 364,643 members is supported on three critical criteria, the credit unions said in the joint statement. The first is dedication to employees and their careers; second, value to members and their communities; and third, the ability to succeed in a marketplace that is expected to see significant change and the consolidation of like-minded credit unions.

When combined next year, and based on information from each credit union’s current Call Reports and Profile Reports, the $7.8 billion institution would employ 1,340 part-and full-time employees, serve 509,011 members and operate 64 branches.

The credit unions said there will be no staff layoffs post merger because it will provide the “scale necessary to create greater opportunities for existing employees, the need for additional team members and significant advancements in products, services and support for members and community partners.”

As far as the combined branch network, CAP COM said in a Q&A to its members, “Branch footprint and location proximity will be reviewed and aligned to best support the needs of our members and communities. We will also continue to evaluate the need for branch expansion.”