The net worth of NARC Federal Credit Union (Beltsville, MD) was wiped out prior to its merger to Agriculture Federal Credit Union (Washington, D.C.) by a significant increase in employee compensation.
On October 1, 2017 Agriculture Federal Credit Union acquired NARC Federal Credit Union.
At the end of the third quarter of 2017, NARC FCU was critically undercapitalized with total net worth of negative $623,577. However, the prior quarter the credit union's net worth was $1,565,677.
The dramatic decrease in the credit union's net worth was driven by a material increase in employee compensation and benefits.
NARC FCU reported $2,237,817 in employee compensation and benefits as of September 30, 2017. This was a 10-fold increase in total compensation from a year earlier of $201,594.
NARC had 3 full-time employees. It appears that at least one NARC FCU employee was richly rewarded from this merger.
A Freedom of Information Act request was filed with the National Credit Union Administration seeking documents associated with this merger.
However, some information in this merger package was redacted, making it impossible to determine if compensation arrangements were part of the merger.
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