Digital Federal Credit Union ($11.9 B) and First Tech Federal Credit Union ($16.7 B) announced on September 30th their intentions to merge in 2025. With combined assets of over $28.7 billion, the merger would make the surviving institution the 6th largest in the United States, behind Boeing Employees Credit Union (BECU).

In the announcement, the credit unions indicated that Digital FCU President and CEO Shruti Miyashiro will assume the same role of the combined credit union, while First Tech’s President and CEO Greg Mitchell will remain through the integration before retiring at the end of 2025.

“The transformative power of this merger of equals will unlock enormous potential to deliver value and opportunity for the people who matter most—our members, our employees and the communities we serve,” said Miyashiro in the announcement. Mitchell added that “Uniting the capabilities of the nation’s two leading technology-forward credit unions will allow us to innovate and push the boundaries to deliver more elevated experiences by making material investments in products and services to meet the needs of our growing membership.”

The decision to merge is likely to draw criticism as the move does not appear to necessitate from financial instability. In the FAQ available on First Trust’s website, the credit union answers the question of whether both institutions are financially stable by stating, “Yes, that’s what makes uniting the two organizations such a strategic value position! Both institutions are well capitalized, far exceeding regulatory standards, have strong liquidity and maintain a balanced loan-to-deposit ratio. These factors, in addition to operating in a safe and sound manner, set the stage for a very strong combined entity—one that will have the resources and scale to deliver value to our membership for years to come.”

The combined credit union will keep the First Tech name, while retaining Digital’s charter. Though the boards of the two credit unions have approved the merger, it will still be subject to approval from the NCUA and members of First Tech. This represents an interesting strategy on the part of the two credit unions by using the name of the credit union whose charter will be eliminated, possibly making the change more appealing to First Tech members, and thus more likely to succeed a vote.