Berlin-based Woodlands Credit Union plans to merge with the larger Portsmouth Northeast Credit Union, creating a combined entity with $872 million in assets and 90,000 members.

Peter J. Kavalauskas, president and CEO of Northeast Credit Union, said talks began about a year ago and that the deal has been actively in the works for six to eight months.

“I think the overriding factor is to develop back office efficiencies and be able to provide more and better services to our combined memberships through these efficiencies,” he said in a telephone interview.

The smaller Woodlands has $112 million in assets and 16,000 members but must meet the same federal requirements and provide the same online, mobile banking and remote deposit capture services as larger institutions, Kavalauskas said.

“Utilizing our more extensive back office operations, we can provide better service to their members and maintain their branch operations and extend our own,” he said.

The merger plan calls for Kavalauskas to continue as Northeast president and CEO and Woodlands’ CEO Timothy J. Collia to become executive vice president and chief operating officer for Northeast.

“We explored many options, and a partnership with Northeast Credit Union was the best strategic alternative for us, and also a great opportunity for our members,” Collia said in a statement.

Both credit unions are state-chartered and obtain federal deposit insurance through the National Credit Union Administration. That means both the state Banking Department and the NCUA must approve the deal, which is anticipated to be completed by the end of the year.

Woodlands merged last summer with the Upper Valley Community Credit Union.

Also last year, the smaller Seacoast Credit Union of Hampton and Exeter merged into Service Credit Union of Portsmouth.

“Northeast and Service are two of the largest credit unions by assets in the state,” said Glenn Perlow, legal counsel for New Hampshire Banking Department.

“So this merger of Woodlands with Northeast is similar to Seacoast merging with Service Credit Union in that they are relatively small credit unions merging into relatively large credit unions,” he said.

Northeast has $720 million in assets and serves 74,000 members.

The combined entity will have 14 offices in Berlin, Gorham, Conway, Plymouth, Lebanon, Portsmouth, Exeter, Dover, Rochester, Manchester, Concord, Lee, Northwood and the Portsmouth Naval Shipyard, with a 15th planned in Merrimack.

Woodlands customers can get answers to their questions by visiting a branch, calling 1-800-313-9630 or sending questions by email to merger@woodlandscu.com.

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Denis Paiste may be reached at dpaiste@unionleader.com.