121 Financial Members to Vote on Proposed Merger With VyStar in January

When the $709 million 121 Financial Credit Union in Jacksonville, Fla., announced plans to merge with the $13.5 billion VyStar Credit Union, also based in Jacksonville, some comments from members about it weren’t all that positive.

But 121 Financial Credit Union President/CEO David Marovich said he is confident that during a Jan. 26 special meeting, members will approve Florida’s largest consolidation. The combined organization’s 2,600 employees would manage $14.1 billion in assets, $10 billion in loans and would serve nearly 966,000 members, if the majority of 121 Financial members vote yes.

“With social media, usually the people that post the most are the negative ones compared to the positive ones,” Marovich said. “It’s kind of funny because even when we post something good that we’ve done in the community, you’ll get likes but nobody really posts anything.”

Some members said they will close their accounts because they don’t trust Vystar after it suffered a collapse of its online and mobile banking platforms for multiple weeks when it was switching to a new system on May 13, 2022. The problem persisted through early June. During the outage, several thousand of VyStar’s members shared their outrage on social media because they could not access their accounts, and were worried about missed payments and deposits. Some members said they would close their accounts.

Interestingly enough, however, VyStar’s membership has grown since its online outage ended in June 2022 when the credit union recorded 829,297 members. At the end of that year, VyStar’s membership expanded to 866,032, according to NCUA Call Reports. As of the third quarter, the credit union’s membership has grown to 915,857.

“We’ve had negative comments in the past and so has VyStar, but I think overall [the merger] will be good for the community, good for our members and very good for our employees on many levels,” he said. “The other thing I will tell you is that probably one of the comments from our members is that we don’t have enough locations. And this [merger] will give many of our members a location closer to where they live or work, and I think that’s a really big thing because in some of the outlying areas we don’t have a branch.”

Approximately 38% of 121 Financial’s 50,012 members are also members of VyStar, according to 121 Financial’s merger documents that were sent to members and filed with the NCUA. The credit union operates seven branches and its headquarters that are all in Jacksonville. VyStar runs 91 locations in Jacksonville, and in several other cities across northern Florida and into Georgia, according to a listing on the NCUA’s website. That total number includes 18 locations in schools.

Post-merger plans call for four of 121 Financial’s seven branches to “remain open for a period of time.” In addition, 121 Financial’s main branch also will remain “open for a period of time.”

“A decision has not been made yet on those particular branches whether or not they will be closed or remain open,” Marovich said. “There are a couple of issues with at least one of [the branches] being that it is in a leased facility and the company that we lease from could terminate the lease.”

Additionally, Marovich said a decision regarding the credit union’s main branch also has not been made because VyStar may utilize the building after all of 121 Financial’s employees move to VyStar’s headquarters.

While 121 Financial employees will continue to be employed by VyStar, the merger documents showed the salary increases and retention bonuses for the top executives and the C-suite executive assistant.

Marovich will continue on for five years as VyStar’s SVP Northeast Community President with a salary increase of $16,000 and two retention bonuses of $122,500 each at six and 12 months after the merger closes. His total compensation was $375,692 in 2021, according to the credit union’s Form 990 filed with the IRS. Total compensation includes base compensation, bonus and incentive pay, retirement, and deferred compensation and nontaxable benefits.

VyStar will also establish a supplemental executive retirement plan for Marovich that will pay him 40% of his annual salary of year five upon his retirement in year six after the closing and for a period of five years, according to merger documents.

121 Financial COO Paul Blackstone will continue on for five years as SVP Special Projects with a salary increase of $95,000 and two retention bonuses of $126,250 each at six and 12 months after the merger closing. Blackstone’s total compensation in 2021 was $364,671. VyStar will also establish a supplemental executive retirement plan for Blackstone that will pay him 35% of annual salary of year five upon his retirement in year six after the closing and for a period of five years.

121 Financial CFO Cyndi Koan will continue on for three years as SVP Financial Special Projects with two retention bonuses of $35,000 at six and 12 months after the merger closing, according to merger documents. Koan’s total 2021 compensation was $285,687, according to the credit union’s IRS filing.

121 Financial SVP of Lending Cathy Hufstetler will continue through the conversion at which time she plans on retiring. She will receive a year’s severance of $273,000 and two retention bonuses of $28,000 at six and 12 months after the merger closing. In 2021, her total compensation was $240,208.

Nichole LeBlanc is an executive assistant for the senior executives and is the liaison for the board of directors, supervisory committee and nominating committee. She will continue on for five years as a senior executive assistant with a salary increase of $5,000 and two retention bonuses of $9,500 at six and 12 months after the merger closing.

Although she is not one of the credit union’s highly compensated employees, LeBlanc had to be listed in the merger documents, Marovich explained, because she is in a special arrangement as an executive assistant who has guaranteed employment through the length of his contract. Her compensation information was not required in the IRS filing.