Vermont’s Largest Credit Unions Agree to Merge

Vermont’s biggest credit unions said they plan to merge because they need to get bigger to compete with the big banks.

Last week, the boards of directors of the $1.9 billion New England Federal Credit Union in Williston and the $1 billion Vermont State Employees Credit Union in Montpelier unanimously agreed to file a merger application with the NCUA. The proposed consolidation is the largest so far in 2022.

Before the board voted to merge, the credit unions conducted what they called extensive due diligence, according to a prepared statement on NEFCU’s website.

If the merger is approved by VSECU’s members and regulators, the combined credit union will operate under the NEFCU brand in late 2022 or early 2023.

In its prepared statement, NEFCU said that even though it is the largest financial institution based in Vermont, the credit union is “very small” compared to regional and national banks and financial service providers within the state.

Among financial institutions headquartered in Vermont, NEFCU and four other credit unions are among the top 10 largest financial institutions. VSECU is ranked the fourth largest by assets, according to DepositAccounts.com.

However, in its prepared statement, NEFCU indicated it is competing against Chase Bank based in Columbus, Ohio, which has $3.2 trillion in assets, and Peoples United Bank, headquartered in Bridgeport, Conn., which operates in six New England states and manages $63.4 billion in assets.

Nevertheless, Chase Bank operates only one branch in Vermont, but Peoples United Bank operates 38 branches in the state that manage $4.5 billion in deposits, according to the FDIC.

If the consolidation is approved, NEFCU will manage more than $3 billion in assets and 17 branches, which will serve nearly 167,000 members. The merger also will maintain NEFCU as the largest financial institution in Vermont. The second and third largest financial institutions in the Green Mountain State are the $1.3 billion Northfield Savings Bank and the $1.1 billion Union Bank, according to DepositAccounts.com.

“We need to be able to deliver many of the things these bigger FIs do to maintain members,” NEFCU said in its prepared statement.

Over the last five years, NEFCU and VSECU have each grown their membership by nearly 7,000, according to NCUA Call Reports. Both credit unions also have substantially increased their loans, assets and net income gains from 2017 to 2021, according to NCUA Call Reports.

NEFCU said it sees a path for future growth opportunities through VSECU because it has developed sustainable energy loans, extensive business services and checking options that NEFCU does not currently offer.

“They also have developed strong partnerships, especially in Central and Southern Vermont that NEFCU does not have and that are important to develop,” NEFCU said in its prepared statement.

NEFCU also said the combined credit unions would have more resources to develop new products and services and introduce them expeditiously to the Vermont market.

If the merger is approved, NEFCU President/CEO John J. Dwyer Jr. will continue as CEO and VSECU President/CEO Rob Miller will serve as president and COO.

No jobs will be lost because of the merger, NEFCU said. There are 198 VSECU employees and 264 NEFCU employees, Call Reports showed.