Two of the largest and most tech-savvy credit unions on the West Coast, Addison Avenue FCU of Palo Alto, Calif., and First Tech CU of Beaverton, Ore. are planning a merger this summer, creating a nearly $5 billion institution that could chart a new path for CU consolidation among like-minded partners.
The proposed Addison-First Tech combination, which will retain the First Tech name and Addison's federal charter with multiple corporate offices, is subject to regulatory and membership approval but aims to be final by the end of the second quarter, officials said.
The combined credit union, with 320,000 members and 38 branches nationwide, will have a branch presence in 10 states and a much sought after membership representing a clientele well-versed in online, investment and social media vehicles, ranging from I-Pods to Twitter. The combined CU would also be in the top 15 largest credit unions in the U.S.
Benson Porter, the 45-year-old head of the $2.5 billion Addison Avenue, is being groomed as the president/CEO of the combined credit unions.
Addison with 17 branches stretching from Massachusetts to Texas, including one in Puerto Rico, serves a Bay Area member base representing some of the nation's renown tech firms, including Hewlett Packard, Cisco, and Microsoft.
Meanwhile, the $2.2 billion First Tech, with 17 branches in Washington and Oregon and a past linked to the fortunes of Tektronix Corp. and a well-educated base of government employees, has built a reputation as a tech leader in product innovation under its retiring president/CEO, Tom Sargent.
Sargent, who turns 60 on St. Patrick's Day and who disclosed his retirement plans last month after 25 years at the First Tech helm, told Credit Union Times, "It is simply time for a new generation to take over" and that he has no regrets about leaving now "to spend time with my family and playing golf."
Sargent said discussions between management and the boards began in earnest last October. The merger will create a product synergy providing complementary member benefits to both CUs, said Sargent.
"Scale for scale, we see our merger as bringing many new products to the market much more quickly than if we had acted alone," said Porter. "It is a good question as to why this merger didn't occur years ago."