The $759 million Texas Trust Credit Union in Mansfield and the $57 million Security One Federal Credit Union in Arlington plan to merge, creating the 18th largest credit union in the Lone Star state with over $815 million in assets and more than 65,000 members.
The credit unions announced Wednesday they have signed an intent to merge agreement with the Texas Credit Union Department and the National Credit Union Association. Once the merger is approved by regulators and by members of Security One, the former autoworkers turned community credit union will merge into Texas Trust CU.
Security One members will vote on the merger during a special member meeting following approval by the regulatory agencies. The regulatory review process is expected to take 30 to 60 days.
The merger benefits the members of Security One by making more services available to them, and gives Texas Trust a bigger presence in Arlington.
"Competing in today's financial market is more challenging than ever," said Pamela Stephens, president/CEO of Security One FCU. "In order to remain competitive and continue to deliver low rates for our members, we determined the best solution for our members was to merge with another credit union."
Though Security One has been financially sound with a net worth/total assets ratio of 7.52, it has been dealing with increasing financial and market challenges. For example, Security One has seen steady declines in its loan and investment income, while its fee income has remained flat from 2008 to 2012, according to NCUA financial performance reports.
Security One had a net income gain of $354,732 in 2008. But it posted net losses of $12,653 in 2009 and $287,572 in 2010. It then recovered to show net income gains of $77,469 in 2011 and $76,642 in 2012, according to NCUA financial performance reports.
The credit union also has seen some decline in its membership. In March 2008, Security One served 10,021 members and now has 9,138, as of March 31 of this year, according to Callahan and Associates.
The 47-year-old Security One FCU was originally known as the Auto Workers Arlington FCU, chartered by 30 employees of a local General Motors plant. The credit union became a community chartered institution in 1997 and changed its name to Security One.
The 25 employees of Security One will join the Texas Trust. Stephens will become part of the executive management team, playing a key role in the merger and future success of the combined credit union.
"Merging with Security One will give Texas Trust's members additional branches in the Arlington community, which is a strategic area of growth for us," said Jim Minge, president/CEO of Texas Trust Credit Union. "The combined synergies of Security One and Texas Trust will benefit the credit union movement as a whole, enabling us to expand our market share in north Texas."