NCUA Finally Approves First Tech-Addison Avenue Merger
Ending a processing period that lasted eight months, the NCUA has approved the nation's biggest interstate merger, the $4.6 billion consolidation of First Tech Credit Union, Beaverton, Ore., and Addison Avenue FCU of Palo Alto, Calif.
The planned consolidation is still subject to approval of First Tech members and the Oregon regulator, but once completed, it could signal a new era in mega mergers among CUs crossing state lines as well as charter structure.
"We are very pleased to receive merger approval from the NCUA, an important first step in the approval process," said a joint statement from Benson Porter, Addison Avenue president/CEO and the designated head of the merged entity, and Brooke Van Vleet, First Tech's interim president/CEO.
The agency actually approved the merger deal Sept. 15 with formal announcement of its action contained in its upcoming monthly activity reports posted online.
For months, both CUs have been conducting an active communications program online and by mail to educate employees and members on the merger's impact.
The Porter-Van Vleet statement noted that "before First Tech can proceed to a member vote, Oregon's regulators must also weigh in and render their decision."
The Oregon CU administrator, David Tatman, was not immediately available for comment though there appeared to be no roadblocks on that front to halt that agency OK, sources said.
Some industry analysts have speculated the NCUA's eight-month delay might have been linked to the agency wanting to resolve the corporate restructuring dilemma in line with its Sept. 24 corporate seizures before clearing a large merger with its potential risk to insurance fund.
Still others said there were issues involving balance sheet considerations and federal and state chartering problems that appeared to stand in the way for a time.
"The NCUA approval is nice, but I think the real key to this merger going forward is exactly what is First Tech giving up since we basically have a credit union, First Tech, with a community charter combining with SEG-based Addison," said one merger specialist who asked not to be identified. "How exactly is that going to work?"
Officials at First Tech and Addison Avenue have refrained from discussing those aspects of the merger.
Both CUs have a high tech membership, with First Tech holding strong market penetration in Portland and Seattle. Addison Avenue has a broad California footprint in Silicon Valley and in the Northwest. If approved, the First Tech CU, as it will be known, will have 38 branches and 320,000 members nationwide, making it the 15th largest in the U.S.
The First Tech-Addison Avenue deal preceded another proposed merger-an even larger California mega merger-of the $3.5 billion Kinecta FCU and the $1.2 billion NuVision FCU. If approved by regulators and members, that CU would serve 300,000 members in 40 branches throughout Los Angeles and Orange counties.
Officials at First Tech-Addison declined to speculate when their merger might eventually be approved. "There is no timetable," said a spokeswoman.