The Pentagon Federal Credit Union will expand to Long Island by acquiring Sperry Associates Federal Credit Union, whose CEO as late as July wrote about the continued viability of midsize credit unions.
Sperry ($ 265.4 million in assets, 16,303 members as of September 30) announced Monday that its members approved the merger in September. Its website said the merger would be completed on December 1, and its phone message on Tuesday said “eligible members” should have already received their “member merger dividend” of $ 350.
Based on the total number of its members, the dividend could cost up to $ 5.7 million.
The One-stop Credit Union is located at 2400 Jericho Turnpike in Garden City Park, NY – approximately 12 miles northeast of John F. Kennedy International Airport and approximately 20 miles east of the Penn branch. PenFed Service Center in Manhattan. Sperry bought the property for $ 1.1 million in January 1996.
PenFed of Tysons, Va. ($ 26.3 billion in assets, 2.1 million members as of September 30) had 51 branches as of June 30. four New York branches including two in West Point and two in Manhattan.
Kevin J. Healy, CEO and vice president of Sperry, said in the press release that the merger with PenFed is the successful culmination of a decades-long financial recovery for the institution.
“We look forward to this exciting new chapter in Sperry’s story,” Healy said. “The merger will allow our members to have improved access to a variety of products and services through the robust offerings of PenFed.”
NCUA records showed Sperry saw his margins shrink from the summer of 2019 until June 30. Its quarterly returns on average assets ranged from a low of 0.03% in the third quarter of 2019 to a high of 0.24% in the first quarter of this year, before falling to 0.14% in the second quarter.
But the third quarter results showed a strong rebound, with an ROA reaching 0.60%. His net worth ratio stood at 8.42% as of September 30, up from 8.05% in June and 8.33% in September 2019.
In the press release, Healy said the board’s desire to merge was shaped by changes in financial services. The entry of large tech companies into the crowded financial services market made it more difficult for midsize institutions like Sperry to gain market share.
“Sperry is currently well capitalized,” Healy said. “The board felt the time was right to leverage the resources of a strong partner like PenFed while Sperry is financially competitive.”
Sperry’s press release cited merger trends that have reduced the number of banks and credit unions, while increasing their average size. Since 2016, the NCUA has approved an average of nearly 200 credit union mergers per year.
“Locally, Long Island generally reflects trends nationally, so it’s very likely that we’ll see more merger activity in the years to come,” Healy noted. “For over a decade, Sperry’s board of directors and management team have worked to successfully build the reputation of the credit union, and this is the next step in that process.
As of June 30, the country had 5,275 credit unions with $ 1.53 trillion in assets and 119 million members. Among them were 4,454 credit unions with less than $ 340 million in assets, representing about 15% of assets and 20% of members of the credit union movement, based on an analysis of data from the NCUA by CU time.
Sperry was founded in 1936 by employees of Sperry Gyroscope Co., a company founded in Nassau County in 1910. Among other products, it built aircraft bomb sights during World War I and II. The company was acquired by other companies in 1986. Its scope of affiliation extended to Nassau County.
Long Island Credit Union’s decision to merge with PenFed came after a Healy’s column published on July 17 in CU time, in which he extolled the virtues and durability of medium-sized credit unions.
“At Sperry,” he wrote, “we’ve found a happy balance in maintaining the services and products our core members love, such as free checks and competitive loan rates, while still offering products niche and specialized credit that match emerging needs. “
“These products are a direct result of Sperry leveraging its positioning in the market,” he wrote. “We are a mid-sized, member-owned credit union proudly serving the Long Island market for over 80 years. While we like to think bigger, we are also taking action at the local neighborhood level. “