in 2008 tied in large part to a collapse in comm-
Mike Sauer, who has served on the $1.8 billion credit union's board for more than 16 years as chairman, vice chairman, treasurer and secretary, will serve as interim CEO until a replacement is named by the board of directors within the next 90 days, according to a Jan. 6 statement from Texans. Addison served at the helm for nearly six years.
"The decision to leave Texans Credit Union was a personal one that involved much discussion and planning with my family and the board of directors," Addison said in a statement. "While I am saddened to depart from this wonderful institution, I have great confidence that the rich history and great success of Texans Credit Union will continue under the leadership of the board and able management team. I am looking forward to having more time to spend with my wife and two young boys."
Texans struggled through 2008. For the first time ever, the financial institution suffered a $29 million loss last year, due in large part to market conditions and values of commercial real estate associated with the housing industry, Addison wrote in a recent letter to members. Over its 55 years in existence, Texans was able to build a capital reserve of nearly $180 million. However, that cache is expected to take a few hits due to the losses.
Last July, the credit union said it would stop originating new member business loans as it saw its commercial lending activity freefall from $311.2 million at the end of 2007 to $15.6 million at the end of the first quarter of 2008. Texans had also reached its 12.25% of assets MBL cap. According to its Sept. 30 NCUA 5300 call report, the most current data, construction and development loans dropped in March 2008 to $243.5 million from $348.5 million in June 2007. Total MBLs also fell to $454.2 million in Sept. 2008 from $613 million over the same period in 2007.
Texans told Credit Union Times it will continue to offer "reasonable" business loans in 2009 but with more prudence as it maintains its focus on managing its existing commercial loan portfolio to minimize exposure. (CU Times, Dec. 24, 2008).
"Our operating plans for 2009 are based on the assumption that the market conditions remain difficult throughout the year," Addison told members in a statement. "As a result, Texans will be taking measures to improve our operating efficiencies and return to profitable level of operation."
The credit union was also in and out of court last year, defending against lawsuits from former executives. The latest involved Richard M. Boyd, a real estate investor who bought the majority share of Texans Commercial Capital in 2007 and filed suit for an alleged breach of contract involving branch leases. Kevin Curley, the former president of Texans Insurance Group, also filed suit in 2007 after claims of a wrongful termination. An arbitrator later ruled in favor of Curley. Texans was also sued in 2006 by three former executives of Texans Commercial Capital for wrongful termination. A jury sided with the plaintiffs, saying each was entitled to $1 million in damages.
Sauer said it is Texans' policy not to comment on litigation. However, he did say, "I think our position has improved, but I can't say anything more" when asked about updates involving each of the cases.
Meanwhile, Addison's resignation announcement took the board by surprise, Sauer acknowledged. The CEO first approached the board back in November, but its directors did not feel comfortable with making a decision right before the holidays, said Sauer, who was retired at the time the board asked him to take the interim CEO spot.
"David had been thinking about this since the November time frame," said Sauer, who was Texans' chairman when Addison was hired. "If you talk to David, he'll probably tell you he has aged five years over the last the year. It started to take a toll on him."
Texans plans to look internally for Addison's successor, Sauer said. He would not say if the credit union had anyone specific in mind. There are several to pick from given the credit union's "strong management team," he added.
Addison will assist with the transition, and he will be involved in a "couple of projects that will need to be cleaned up," Sauer said. He did not offer further details on the projects.
"He has a corporate memory that we're going to have to tap. What's been key about David is innovation and forward thinking," Sauer explained. "That's the kind of thing we want to get out of his head."
Sauer said he was not sure what Addison's plans are after he leaves on Jan. 31. However, because he's "well connected and respected in the industry," Sauer said he's sure Addison will have other opportunities presented to him.