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October 8, 2020

Maine State Credit Union, Midcoast FCU plan to merge

File photo / Tim Greenway Joe Gervais is the president and CEO of Midcoast Federal Credit Union.
By William Hall

Maine State Credit Union and Midcoast Federal Credit Union on Wednesday announced that they plan to merge, creating what would be the largest credit union in the state, with over $725 million in assets.

Terms of the deal were not disclosed. The two member-owned financial cooperatives expect to finalize the merger in 2021, subject to regulatory and member approval.

Maine State was ranked the second-largest credit union in the state during 2019 by Mainebiz, and currently has assets of over $514 million. Midcoast has assets of $209 million. Maine Savings FCU, based in Hampden, ranked as the state’s largest credit union last year, with roughly 30,000 members and assets of $424 million.

If the merger of Maine State and Midcoast is completed, the combined entity would serve 46,000 members through branches in Augusta, Bath, Brunswick, Edgecomb, Freeport, Thomaston and Waterville. The new credit union would keep the Maine State name and headquarters in Augusta.

Current Maine State President and CEO H. Tucker Cole would serve as CEO of the merged organization, while Midcoast President and CEO Joe Gervais would be president. No layoffs are planned as a result of uniting the two credit unions, according to the Midcoast website.

“We strongly believe that employee satisfaction is essential to member satisfaction. Finding a partner that is genuinely committed to the professional development of its employees was essential in Midcoast’s decision to partner with Maine State,” said Gervais. “Together, we will continue to cultivate a workplace that values and empowers its employees.”

The goal of the merger is to enhance value for members through innovation, vendor consolidation, and the alignment of products and services, according to the release.

“As we explored this collaboration, we found many synergies in our approach to providing service excellence,” said Cole. “We recognize that together, our members will benefit from expanded service locations, improved technology solutions, and highly competitive loan and deposit rates.”

Maine credit unions have increasingly joined forces over recent years. In a letter to Midcoast members, Gervais attributed the consolidation to the state’s modest population growth and the escalating costs of operation.

Since 2006, the number of Maine credit unions has declined by 28%, while their combined assets have grown by 128%, closing in on $10 billion, he noted.

“Today’s forecast for a sustained economic slowdown and low interest rate environment will only serve to accelerate those trends,” Gervais wrote.

In June, Augusta-based Connected Credit Union and Winslow Community Federal Credit Union completed a merger. Last year, Infinity FCU of Westbrook planned a merger with an Illinois credit union, but ultimately called off the deal.

About Maine State Credit Union

Founded in 1935 to serve state government employees, Maine State Credit Union retains its original mission: "to promote thrift among its members, by affording them the opportunity for accumulating their savings, and to create for them a source of credit for loans for provident and productive purposes." In 2004, MSCU was granted a community charter to serve all of Kennebec County. In 2006, Maine State merged with Greater Waterville Area Federal Credit Union and opened a Waterville branch. In 2019, the credit union expanded again to the counties of Androscoggin, Cumberland, and Sagadahoc. Today, MSCU serves over 31,000 Mainers with over $514 million in assets.

About Midcoast Federal Credit Union

Chartered in 1956 by the parishioners of St. Mary’s Church in Bath, St. Mary’s Federal Credit Union was formed. In the 1970s, the charter was expanded to serve the larger community and in 1986, the credit union merged with St. Charles FCU in Brunswick to become Midcoast Federal Credit Union. The credit union continued to grow and expand its service area, which today includes Sagadahoc, Lincoln, and Knox counties and portions of Cumberland and Androscoggin counties. Midcoast serves over 15,300 members with $209 million is assets.

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