Two Seattle credit unions, the $228 million Prevail Credit Union and the ailing $32 million Transportation Northwest CU are preparing for an August merger, it was announced this week.
Under a preliminary agreement subject to approval of regulators and members, Transportation Northwest will retain its name as a division of the surviving Prevail, which combined will have 22,500 members and 10 branches. The consolidated CU will serve members in three metro Seattle counties: King, Pierce and Snohomish.
Transportation, which had large losses in its real estate portfolio in 2009 and a 14% delinquency rate, had approached Prevail as a potential partner last February "considering our membership profiles of government employees were very much in common," said Thomas Graves, president/CEO of Prevail.
For its part, Prevail while also suffering an $800,000 loss in 2009 related to the NCUA assessment and corporate capital writedowns but with positive core earnings, sees expansion opportunities for the combined CUs in the Transportation CU consolidation, said Graves.
"Retaining the Transportation Northwest name is a new strategic direction for the combined credit unions once the merger is approved," explained Graves. Transportation already enjoys "strong brand recognition" and so management sees no need to change it unless conditions prove otherwise.
This is the second merger for Prevail in 2010. Last January Prevail merged the $3 million Transport FCU.