DETROIT -- Sometimes timing is everything. For the $700 million Detroit Edison Credit Union, the unfortunate collapse earlier this year of the $250 million Huron River Area Credit Union in nearby Ann Arbor just happens to fit neatly into its strategic expansion for branches and new members.
Huron River is, of course, the Michigan CU caught up in bad loans arising from the Florida real estate turmoil, which also brought down two Colorado CUs--Norlarco of Fort Collins and New Horizons Community of Denver under NCUA purview.
"So far our purchase of Huron River has gone very well and our plans definitely call for more branches in eight counties which include those served by Huron River," said William Thiess, president/CEO.
Within perhaps a year DECU will come up with a new name for the combined CU, but the job now is to manage two separate processing systems for DECU and the seven Huron River branches, which serve 39,000 members.
Detroit Edison, according to Thiess, was the highest bidder among eight other Michigan CUs invited to bid on the good assets of Huron River, which has since been renamed Huron River Financial, a division of DECU.
For more than a year, the single sponsor DECU has eyed a possible Michigan merger and even had considered Huron River as a partner before its serious problems became known earlier this year, said Thiess.
"But we had no idea of their problems until we heard from NCUA," said Thiess, whose CU is now ninth largest in the state with 66,000 members. Huron River had served a membership base which included 300 SEGs in the Michigan counties of Washtenaw, Livingston, Wayne, Oakland, and Macomb.
Under Michigan's CU laws, DECU, which has been operating from a single office in downtown Detroit, can now expand into three other counties. Before the purchase and assumption agreement with NCUA, Detroit Edison's assets totaled $485.6 million and it served 28,000 members.
DECU, chartered in 1944, is located in the headquarters of DTE Energy, the parent for several subsidiary firms including Detroit Edison and Michigan Consolidated Gas. The membership includes employees, retirees and contractors of the firms.
Huron River served SEG groups employed in engineering or scientific fields including members of the Engineering Society of Detroit.
DECU, said Thiess, was informed in October that it had the winning bid and "so we've got four weeks to get ready once we signed the agreement."
"I've had maybe two phone calls and couple e-mails from Huron River members but all in all it has gone very smoothly," said Thiess.
Nonetheless, Thiess acknowledged that the acquisition represents a big membership leap, "from 28,000 members and adding 38,000, a jump of 140%."
--jrubenscut@aol.com
