GTE FCU and Suncoast Schools FCU Terminate Merger

On July 15, GTE FCU and Suncoast Schools FCU called off the largest merger in credit union history, which would have created an $8 billion credit union.

The press release announcing the termination of merger stated that “the potential disruption in operations to both organizations was extensive enough to outweigh the potential benefits of the merger.”

What was unsaid is that this merger probably would not have received regulatory approval.

Both credit unions as of the end of the first quarter were less than well capitalized. In fact, Suncoast Schools barely met the requirement of being adequately capitalized with a net worth ratio of 6.05 percent.

GTE reported a loss of almost $6.8 million and 2.49 percent of its loans were 60 days or more past due. Suncoast Schools reported a loss of $23 million and 3.88 percent of its loans were 60 days or more delinquent.

As this quick look at their financial reports show, this proposed merger of two dented credit unions would have a hard time cutting the regulatory mustard.