State Employees Credit Union of MD to merge with White Eagle Credit

Maryland's largest state-chartered credit union, State Employees Credit Union of Maryland Inc., said it is in discussions to merge the smaller White Eagle Credit Union into its ranks.

The move comes as Baltimore-based White Eagle has struggled to gain membership. The credit union that once was a savings and loan bank serving the Baltimore Polish community only added 22 members last year, according to credit union analyst firm Callahan & Associates Inc.

White Eagle has assets just over $1 million and three part-time employees. Its office is only open one night a week for three hours. For the first nine months of the year, it posted net income of $7,684.

The credit union thinks its members could be better served by a larger institution, said Sharon Sykes, vice president of marketing at SECU. Sykes said White Eagle sought out the deal.

White Eagle officials did not return calls for comment.

Industry analysts said small credit unions like White Eagle have been pressured by new advances in banking services that are typically beyond their financial reach.

It gets tough to offer the kind of services people expect nowadays, said Pat Keefe of the Credit Union National Association.

Keefe said customers now demand much more than the traditional checking and savings account from their financial institution. Services like ATMs and Internet banking are tough for small institutions to provide, she said.

Still, many credit unions have prospered. SECU with 240,000 members and $1.4 billion in assets is the largest state-chartered credit union in Maryland. In total, Maryland's 126 credit unions together have assets approaching $11.2 billion.

Credit unions originated around the idea that members could get better rates on loans and deposits if profits were kept to benefit those who had money in the institution. Customers had to meet certain requirements set in credit union charters to do banking with the institution. Many credit unions grew from groups of workers with the same employer.

But some employer-based unions have struggled to grow recently, especially as industry and manufacturing nationwide have declined.

The staff in the smallest credit unions often are unpaid or are the individuals who started the credit union, said Pat Raymond, vice president of government and public affairs at the Maryland Credit Union League.

The founder might be getting older and want to retire and there is no one to take over, Raymond said.

While credit unions tend to have less than $50 million in assets, the smallest ones have begun disappearing, according to Keefe.

What we often see is the credit union finally makes the decision, 'Do we want to continue this?' Keefe said.

Last year, 132 credit unions with less than $2 million in assets merged with larger credit unions, according to Callahan & Associates. In 2003, that number was 114.

SECU officials applied to state regulators to merge with White Eagle last month. Sykes said due diligence was still ongoing, and White Eagle shareholders must also still ratify the proposal.

We still are in discussions. Nothing has been finalized, Sykes said.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.