Ann Arbor-based MidWest Financial Credit Union seeks to merge with DFCU Financial, based in Dearborn, according to documents filed with the state.

The merger, after it's approved, would result in MWFCU members and assets moving into the Dearborn-based financial institution, which is the largest credit union in Michigan.

The announcement comes after MidWest posted a net loss of $19,243 at the end of the first quarter, following a full year of losses that topped $1 million every quarter since March 2009.

The management team will be led by current DFCU Financial President and CEO Mark Shobe, according to a news release.

The move was announced to the 70 or so MidWest employees today, said MWFCU spokesman Tom Gisewhite.

"We're excited about it," he said.

Unclear, he said, is how staffing or branch operations could be impacted by the move. No layoffs or closings have been announced.

"We're gong to need all those folks," Shobe told AnnArbor.com. "... We intend to expand, not contract, in Ann Arbor."

MWFCU serves 17,680 members out of four branches in addition to its headquarters on Green Road in northeast Ann Arbor. Additional locations are on Carpenter Road in Pittsfield Township, in the University of Michigan Medical Center, near Briarwood Mall and on Jackson Road.

The credit union owns its buildings on Green Road, near Briarwood and on Jackson Road, and it leases the other spaces, Gisewhite said.

The merger is voluntary and not the result of any oversight action, Gisewhite said.

The move expands the reach of DFCU, which also operates in Grand Rapids and Lansing.

Shobe said DFCU started talks with MidWest about a year ago, as his credit union sought to enter the Ann Arbor market and MWFCU explored a strategic partnership that could lower operating costs.

The industry already was oversupplied with banks and credit unions when the financial crisis began in late 2008, speeding up the wave of consolidations, Shobe said.

"In our business, like many, we benefit from economies of scale," Shobe said.

Shobe said DFCU tried to enter the Ann Arbor market in the past, and it considered opening its own branches.

"It's always better to merge," he said.

Over time, he added, new local outlets could be added to the mix of branches, and some could be relocated.

MidWest had total assets of $181 million as of March, down from $182 million a year earlier, according to the National Credit Union Association.

DFCU had assets of $2.7 billion during the same timeframe, up from $2.48 billion a year earlier.

DFCU posted net income of $8.7 million at the end of the first quarter, after posting a loss of $4.7 million in March 2009. Earnings for subsequent quarters in 2009 were $17 million, $25 million and $11 million, according to NCUA data.

That posted loss, Shobe said, was the result of regulators telling credit unions to book their replenishments of insurance funds in the first quarter of 2009 instead of spreading the cost over 7 years. They later reversed that decision, but the numbers remain in the official statements.

Without that figure, the first quarter 2009 results would have shown about $10 million in income, Shobe said.

"We've never really had an operating loss," Shobe said of recent years.

Meanwhile, MidWest’s return on assets were -0.04 percent at the end of the first quarter, compared to a peer average of 0.33 percent and DFCU’s return of 1.31 percent.

"Our financial statement is a reflection of the economy and accurately accounting for loan losses that were there and future loan losses," Gisewhite said.

DFCU operates 20 offices in Metro Detroit, Lansing and Grand Rapids, according to its website. It has 201,476 members, according to NCUA.

The chair of the MWFCU board of directors is Richard Nowakowski, founder and CEO of Nowakowski & Associates healthcare consultants, according to the website.

According to the MWFCU website, members received notice of the proposed merger today. They'll be asked to vote on it in August.

Member forums will be held at 6 p.m. Thursday, July 15 and at 11 a.m., Tuesday, July 20 at the northeast Ann Arbor office, 2400 Green Road.

Paula Gardner is Business News Director of AnnArbor.com. Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.