Teachers Mutual Bank and Fire Brigades Employees' Credit Union have announced plans to merge, following the signing of a memorandum of understanding to work on a mutually acceptable proposal.If the deal proceeds it will be the second in two years for Teachers, which merged with Perth-based credit union Unicredit (now UniBank) last year.FBECU, which is based in New South Wales, has 7400 members and A$215 million in assets. Teachers has 174,000 members and $5.3 billion in assets.FBECU general manager Jim O'Connell said his organisation conducted a strategic review last year and accepted that the best way to tackle the challenges of being a small financial institution would be to seek a merger.O'Connell said he hoped that the merger would help FBECU deliver a bigger range of products and services to its members, along with better digital services and some pricing improvements.FBECU will retain its own branding, although it will have a name change to incorporate the term "bank".FBECU members will vote on the proposal around the middle of the year.Teachers Mutual Bank chief executive Steve James said the combined organisation would have a significant opportunity to increase revenue and reduce its cost-to-income ratio.