BECU Trust Merger Looks to Expand on Decade of Service
More than 10 years after it opened its doors for business, BECU Trust Co., has entered a new phase.
The wholly owned subsidiary of the $11.5 billion BECU in Seattle merged with MEMBERS Trust Co., the Tampa, Fla.-based, nationally-chartered, credit union-owned trust firm, on July 29. The new name will be BECU Trust Services.
With MTC being the surviving entity, BTC’s staff of eight, which includes four trust officers, will continue to serve BECU’s more than 826,000 members at the credit union’s Tukwila, Wash. Financial Center, said Linda Davenport, vice president and senior trust officer at BECU Trust. Launched in 2004, MTC is owned by several credit unions and CUNA Mutual Group.
The merger is actually two years in the making. In July 2011, both trust companies announced their intentions to merge. Part of the motivation for combining the two organizations was to provide BTC with access to additional staff, expertise, and technical support to expand to current and future members without sacrificing the personal relationships that had been developed, BECU said at the time.
Fast forward two years and the goals are still intact.
“What prompted the merger was really looking at increasing strength on the investment side,” Davenport said. “The market can change and turn on a dime depending on what’s taking place. We were also looking at opportunities to take advantage of economies of scale from an operational aspect.”
Prior to the merger, MTC had $800 million in, Davenport said. Other businesses and BTC’s assets under administration, which topped $180 million, pushed MTC’s total past the $1 billion mark.
When BTC officially launched in 2003, it set out to offer a range of services including investment management, living trusts, estate and financial planning, personal representative and executor services, retirement plan rollovers and fiduciary and investment services.
Davenport said over the past decade, BTC has served a gamut of members on what she describes as their unique journeys. For instance, she said there has been an increase in referrals for special need trusts to assist those family members with disabilities and settlement trusts. With the merger, MTC will be able to provide very comprehensive information and staff expertise to continue facilitating these forms of estate planning, particularly with the special need accounts.
“That part of the business is feel good business because we can help add value to a family and make a difference in their lives,” Davenport said. “Trust services are really a natural fit for credit unions because as a fiduciary, we are held to a very high standard when it comes to serving our members.”
While the costs to merge BTC into MTC were not provided, the expenses are compared to those for a startup business, said Todd Pietzsch, manager of public relations for BECU.
“Sure, there would be upfront costs to put it together,” Pietzsch. “We’re looking at longevity. The plan is more long term in nature.”
Davenport said BECU Trust Services has an ownership stake in MTC. BECU Senior Vice President of Member Operations Scott Strand will also become a member of MTC’s board of directors.
“We share the same values and mission to provide trust and investment services in the best interest of the member so the merger will prove to be beneficial to both entities and more importantly to our members,” said Tom Walker, president/CEO of MTC, who added that BTC approached the company about merging.
The BTC merger is the latest union for MTC. In 2007, Members Trust Co. of Colorado merged into MTC bringing in additional $100 million in assets and an increase in trust officers available to credit unions.