An absorption would put $3.0 billion in assets and 155,800 members under PenAir's Florida charter. Fort McClellan holds more capital and pays less for its funding. It also runs at a higher operating cost.
The deal
In a joint release on October 21, 2026, Fort McClellan Credit Union and PenAir Credit Union announced plans to merge.1 Fort McClellan, a $224 million credit union based in Anniston, Alabama, would merge into PenAir, a $2.8 billion credit union based in Pensacola, Florida.
According to the announcement, Lee Morgan, PenAir's current president and CEO, would lead the combined credit union in the same role. Angela Smith, Fort McClellan's president and CEO, would serve as president of a Fort McClellan Division during integration. PenAir's FAQ says the boards of both credit unions approved moving forward.2 The merger still requires regulatory approval and a vote of eligible Fort McClellan members. The parties expect the legal merger in the first half of 2027.
CUCollaborate classifies a combination by the smaller party's assets as a share of the larger party's. Fort McClellan's $224.1 million is 7.9% of PenAir's $2.82 billion, which places this deal in the band CUCollaborate calls an absorption. Deals at 70% or above are classed as mergers of equals, and those between 30% and 70% as mergers of similars. The bands are CUCollaborate's own, not an industry standard.
At a glance
Figure 1: PenAir Credit Union and Fort McClellan Credit Union at a glance, June 30, 2026 unless noted
| PenAir Credit Union | Fort McClellan Credit Union | Combined | |
|---|---|---|---|
| Scale | |||
| HQ / charter / field of membership type | Pensacola, FL; Florida state; geographic | Anniston, AL; Alabama state; geographic | PenAir (Florida state) |
| Total assets | $2.8B | $224.1M | $3.0B |
| Members | 140,350 | 15,449 | 155,799 |
| Branches / full-time employees | 18 / 408 | 6 / 67 | 24 / 475 |
| Capital | |||
| Net worth ratio | 11.48% | 12.73% | 11.57% |
| Earnings | |||
| Return on assets, trailing 12 months | 0.57% | (0.07%) | 0.52% |
| Operating expense / average assets | 3.37% | 3.84% | 3.41% |
| Funding and liquidity | |||
| Loan-to-share | 71.66% | 48.75% | 69.91% |
| Cost of funds | 1.95% | 1.09% | 1.88% |
| Borrowings | $100.0M | None | $100.0M |
| Credit | |||
| Allowance to loans | 1.55% | 0.76% | 1.50% |
| Designation | |||
| Low-income designation | Yes | Yes | Yes |
Source: NCUA Form 5300 call reports, June 30, 2026, unless noted. Trailing 12 months covers July 2025 through June 2026.
What the parties say
Both credit unions frame the combination around shared values and added resources. In the joint release, Morgan said the two organizations "share the same beliefs about what a credit union should be." Smith said Fort McClellan looked for a partner "that respected what we have built and shared our commitment to people."1
The release lists what Fort McClellan members would gain: a larger branch and ATM network, PenAir's virtual branch, and expanded business and wealth management services. The announcement also commits to employee retention initiatives, expanded benefit opportunities, and a special dividend for eligible Fort McClellan members paid "prior to the legal merger."
For PenAir members, the FAQ says the merger brings no planned location closures or product changes.2
What the data shows
The call reports show two balance sheets built in different ways.3
Funding. Fort McClellan lends out 49% of its shares and carries no borrowings. PenAir lends out 72% of its shares and has drawn $100 million on a line of credit. Fort McClellan also pays less for its funding, with a cost of funds over the past four quarters of 1.09%, compared with 1.95% at PenAir. The merger would pair Fort McClellan's lower-cost deposits with PenAir's loan demand.
Earnings and capital. The two earnings trends run in opposite directions. PenAir's net income for the first half of 2026 fell to $6.0 million from $6.8 million a year earlier. Fort McClellan earned $201,000 over the same six months, after a $302,000 loss a year earlier. Over the past four quarters, PenAir's return on average assets is 0.57%, compared with negative 0.07% at Fort McClellan. Fort McClellan holds more capital relative to its size, with a net worth ratio of 12.73%, compared with 11.48% at PenAir.
Cost and footprint. On operating cost, the comparison reverses. Fort McClellan's operating expenses over the past four quarters ran 3.84% of average assets, compared with 3.37% at PenAir. Matching PenAir's ratio would lower Fort McClellan's operating expense by about $1.0 million a year. Because the two fields of membership do not share a county, savings would not come from consolidating branches that serve the same area. The announcement does not say whether PenAir would add Fort McClellan's nine counties to its field of membership.
Disclosure status
Figure 2: What the announcement discloses, and what it does not
| Element | Status | What the record shows |
|---|---|---|
| Surviving charter and legal name | Disclosed | PenAir Credit Union continues. Fort McClellan locations would operate for a time as a division of PenAir. |
| CEO and president roles | Disclosed | PenAir's president and CEO leads the combined credit union. Fort McClellan's CEO becomes division president during integration. |
| Board seat split | Not yet disclosed | Not stated in the joint release or the FAQ. |
| Headquarters | Not yet disclosed | PenAir, the continuing credit union, is based in Pensacola. |
| Executive team beyond CEO and president | Not yet disclosed | Not stated in the joint release or the FAQ. |
| Employee retention commitments | Disclosed | Employee retention initiatives and expanded benefit opportunities. No headcount figure. |
| Branch changes | Not yet disclosed | No PenAir closures planned. No statement on Fort McClellan's six branches. |
| Systems conversion | Not yet disclosed | Integration is phased through 2027 and into 2028. |
| Changes to dividends, rates, or fees | Disclosed | Special dividend for eligible Fort McClellan members before the legal merger. Amount not stated. |
| Merger-related compensation | Not yet disclosed | Not stated in the joint release or the FAQ. |
| Member vote date and outcome | Not yet disclosed | Vote follows regulatory approval. |
| Expected legal closing | Disclosed | First half of 2027. |
Source: PenAir and Fort McClellan joint release, October 21, 2026; PenAir's merger FAQ; 12 CFR Part 708b.
Regulatory path and what's next
Three regulators must review the merger, each for a different reason. The Alabama Credit Union Administration must review it because Fort McClellan holds an Alabama charter. The Florida Office of Financial Regulation must review it because PenAir, the continuing credit union, holds a Florida charter. NCUA must also review it because both credit unions are federally insured, under its merger rule, 12 CFR Part 708b.4
Only Fort McClellan members vote. According to PenAir's FAQ, the vote will take place after regulatory approval.2 Approval requires two-thirds of the Fort McClellan members who participate. No vote date has been announced.
The next public document is Fort McClellan's notice of special meeting to members. Part 708b sets out what that notice must contain, including merger-related financial arrangements. The dividend amount, the vote date, and the board seat split would typically appear there first.
How CUCollaborate can help
Our Merger Member Benefit analysis prices every account on both credit unions' rate and fee schedules. If your board is weighing a merger or preparing its member notice, book 30 minutes with our team.
Sources
- PenAir Credit Union and Fort McClellan Credit Union, joint announcement, October 21, 2026.
- PenAir Credit Union, merger FAQ.
- NCUA Form 5300 call reports, June 30, 2026 and June 30, 2025 cycles, for PenAir Credit Union (charter 68734) and Fort McClellan Credit Union (charter 61800), via NCUA's Research a Credit Union and Credit Union and Corporate Call Report Data pages.
- 12 CFR Part 708b, NCUA's merger rule for federally insured credit unions, including the member-notice disclosure of merger-related financial arrangements (§ 708b.106).
Data notes. Exact figures, June 30, 2026: total assets $2,823,572,366 (PenAir), $224,120,206 (Fort McClellan), and $3,047,692,572 combined; members 140,350, 15,449, and 155,799; net worth $324,138,230 and $28,522,459. Combined figures are simple sums, or ratios recomputed on combined balances, before merger accounting adjustments. Trailing 12-month figures equal the first half of 2026 plus full-year 2025, less the first half of 2025. Average assets are the mean of June 30, 2025, and June 30, 2026, totals. Cost of funds divides trailing total interest expense by the average of shares, deposits, and borrowings at those dates. PenAir's loan-to-share ratio uses total shares and deposits of $2,444,908,226. Operating expense calculation: Fort McClellan's trailing ratio (3.84%) less PenAir's (3.37%), times Fort McClellan's average assets of $224,098,872, equals $1,041,518. The figure is before integration costs. The release cites more than 155,000 members and 22 locations. The June 30, 2026, call reports list 24 branches. Employee counts are full-time equivalents as reported on the call report.
