DALLAS — TNB Card Services, the card portfolio purchasing and servicing affiliate of credit union-owned Town North Bank will be one of the beneficiary's of an additional $60 million that the bank's 36 CU owners have invested in the institution.
The private stock offering is one of the first stock offerings in Texas history for a privately held community bank, TNB said.
TNB provides credit card services, personal identification number and signature debit card services and ATM driving for 450 credit unions spread over 36 states. The firm also provides 24/7 call center support, fraud and security services and portfolio consulting.
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Since 2002, when it began purchasing credit union card portfolios and entering agent issuing contracts with the sellers, the firm has purchased more than 100 CU card portfolios.
"With our strong financial position and the stock offering, our ability to purchase additional credit union card portfolios is very much enhanced," said Scott Wagner, executive vice president of TNB Card Services.
Wagner said that the exact proportion of the money that will be available for portfolio purchases has not been set and that some of the money would also go to help further develop and streamline the firm's card servicing and management tools. He downplayed the idea that the extra money would necessarily mean that TNB would change its card portfolio buying strategy or necessarily make any higher bids for card portfolios. "We have a portfolio buying strategy, which we are sticking with," Wagner said. "We examine each portfolio that we bid on for potential return and our analysis gives us a figure for the premium," he said. In general, TNB has sought a market niche as a purchaser of smaller credit union card portfolios, though not exclusively. Often these have been smaller than other bidders might want. The increased capital seems to indicate that TNB will step up its activity to begin bidding on larger portfolios as well, brokers noted.
Tim Kolk, managing partner for Brookwood Capital, a card portfolio brokerage headquartered in Peterborough, N.H., said the brokerage viewed the news of TNB's additional card capital as "spectacular." "We think they are good people, they have a good solution in the credit union space and they have been picking up their activity. This news indicates that TNB has committed to portfolio purchases as an additional investment opportunity," Kolk said.
Kolk pointed out that the 22 credit union portfolios that TNB bought last year and the additional activity the firm has shown this year has indicated that TNB is both bidding on more portfolios and bidding on larger portfolios than it generally did earlier.
"If you look back through the record and recent activity you will see some $12 million portfolios, a $15 million portfolio, I think a $17 million dollar one…these are generally bigger than they did previously," Kolk said. –[email protected]
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