Notice of Special Meeting of the Members on Proposal to Merge

NMA Federal Credit Union

On June 3, 2021, the Board of Directors of your credit union approved a proposition to merge NMA Federal Credit Union (NMA) with Pentagon Federal Credit Union (PenFed). You are encouraged to attend a virtual special meeting of your credit union at https://www.NMAFCU on December 8, 2021 at 5:30 PM.

Purpose of the Meeting

The meeting has two purposes:

  1. To consider and act upon a proposal to merge our credit union with PenFed, the continuing credit union.
  2. To approve the action of the Board of Directors of our credit union in authorizing the officers of the credit union, subject to member approval, to carry out the proposed merger.

If this merger is approved, our credit union will transfer all its assets and liabilities to PenFed. As a member of our credit union, you will become a member of PenFed. On the effective date of the merger, you will receive shares in the continuing credit union for the shares you own now in our credit union.

Other Information Related to the Proposed Merger

The directors of the participating credit unions carefully analyzed the assets and liabilities of the participating credit unions and appraised each credit union’s share values. The appraisal of the share values appears on the attached individual and consolidated financial statements of the participating credit unions.

The directors of the participating credit unions have concluded that the proposed merger is desirable for the following reasons:

In today’s landscape of digital transformation coupled with evolving technology, regulatory compliance, and increasing cybercriminal threats, our Board of Directors evaluated strategic possibilities to assure that you, our member, will continue to receive the full range of products and services you deserve.

To ensure continuity of operations while seeking to expand product offerings and improve services, we have been diligently searching to find alternatives. A merger with PenFed meets the full range of our objectives: growth of membership, expansion of product offerings, infusion of investment in IT cybersecurity, improved training, and enhanced community service. After considering alternatives, we determined that a merger with PenFed is in the best interest of our members.

Net Worth

The net worth of a merging credit union at the time of a merger transfers to the continuing credit union. PenFed has a higher net worth to assets ratio than NMA.

Share Adjustment

NMA’s Board of Directors has determined to distribute a portion of NMA’s net worth (approximately $100,000) to its eligible members in the merger. Eligible members are defined as those natural person members having at least one share in their regular savings account and who continue to be a member in good standing as of the date the capital distribution is paid. A member is not in good standing and is ineligible to receive the bonus dividend if they have caused the credit union a loss due to loan and/or share charge-offs or have a loan and/or a VISA credit card account that is 60-days or more past due.

Merger-Related Financial Arrangements

NMA’s Board of Directors has also paid special attention to the protection of its highly valued employees. I am very happy to inform you that PenFed will retain all NMA staff and you will see all the same faces when you visit our branch locations after the merger. A major aspect of our decision to partner with PenFed pertains to its best-in-class employee benefits. PenFed is a national destination employer that offers competitive benefits to all employees, including individual and family health, vision and dental insurance, 401K matching, life-insurance, education assistance and other typical benefits. NMA employees will be eligible to participate in these benefits in accordance with the terms and conditions of the benefit plan documents. The amount of such benefits is incalculable at this time as they are dependent on the employees’ corresponding elections. A ten percent (10%) retention bonus, not to exceed $10,000, will be paid to each NMA employee that is employed at PenFed 6-months after the merger completion date.

NCUA Regulations require merging credit unions to disclose certain increases in compensation that any of the merging credit union's officials have received or will receive in connection with the merger. No merging credit union official will receive an increase in his or her compensation.

However, PenFed will provide NMA’s CEO, Michael Coleman, with a three-year guarantee of employment.

Additionally, the CEO, Michael Coleman, will be entitled to the following OPTIONAL severance payment:

  • If termination of employment by either party occurs within twelve (12) months after the merger completion date, twenty-four (24) months of his current annual salary.
    Beginning in the thirteenth (13th) month of employment following the merger completion date and for each successive month, up to the thirty-sixth (36th) month of employment, one (1) month of severance pay will be deducted from the total twenty-four (24) month severance guarantee.
  • Michael Coleman’s annual salary is $142,000; maximum payout if employment is terminated by either party would be $284,000.

The aforementioned severance package may result in a one-time payment of $284,000.

Changes to Services and Member Benefits

Shared Branch Service Fax Service
Business Checking/Deposit Accounts House Valuation Service
Courtesy Pay Overdraft Protection Service VISA Gift Card

The following table outlines any increases in service fees:

Service Fee PenFed NMA
Debit Card Balance Inquiry/Transfer at Foreign ATMs $1.50 $1.00
Bank to Bank Wire Transfer - Outgoing $25.00 $20.00

Your savings will continue to be federally insured by the National Credit Union Share Insurance Fund to the maximum limit allowed by law.

Because PenFed is a healthy, financially sound credit union, the amount a member has on deposit at NMA before the merger will result in an equal amount on deposit at PenFed after the merger and no adjustment in the accounts of any member will be required.

Branch Locations

PenFed intends to maintain the current NMA branches, located at:

  • 4920 Haygood Road, Virginia Beach, VA 23455
  • 5300 Kemps River Drive, Virginia Beach, VA 23464
  • 4376 Lankford Highway, Suite #1, Exmore, VA 23350
  • 239-A Mason Avenue, Cape Charles, VA 23310
  • 105 Ruffin Street, Emporia, VA 23847

PenFed has 45 branches nationwide, with five branches in Virginia:

  • 7940 Jones Branch Drive, McLean, VA 22102
  • Fort Belvoir – restricted to Military ID card holders
  • Fort Myer – restricted to Military ID and DOD card holders
  • 5775 Barclay Drive, Suite 6, Alexandria, VA 22315
  • 14040 Central Loop, Woodbridge, VA 22193

PenFed's main office is located at:

  • 7940 Jones Branch Drive, McLean, VA 22102

Voting Information

It is the recommendation of your Board that you vote “yes” to approve the merger. Please be assured that you are our valued member, and we have every confidence that you will be pleased by the level of commitment, service, and value that you will receive from PenFed. We strongly believe that the proposed merger will provide our membership improved services, access to a more robust and competitive product offerings, and an online and mobile banking experience that NMA is currently not able to offer you, our valued member.

The merger must have the approval of a majority of members of the credit union who vote on the proposal. The Board of Directors encourages you to attend the meeting and vote on the proposed merger. Whether or not you expect to attend the meeting, we urge you to sign, date and promptly return the enclosed ballot to vote on the proposed merger.

If you wish to submit comments about the merger to share with other members, you may submit them to the National Credit Union Administration (NCUA) at or National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. The NCUA will post comments received from members on its website, along with the member's name, subject to the limitations and requirements of its regulations.

The independent firm CUBallot will serve as the Teller of Election and will attest to the balloting process and results.

Enclosed with this Notice of Special Meeting is a Ballot for Merger Proposal. If you cannot attend the meeting, please complete the ballot, and return it to the Teller of Election using the enclosed self-addressed and prepaid envelope provided no later than 5:00 PM on December 7, 2021. To be counted, your ballot must reach us by the date and time announced for the meeting. Or, you can vote online at https://www.NMAFCU and select the “Vote Now” button.

Directions for Attending Virtual Special Meeting
To attend the virtual Special Meeting, please visit: