Two Houston-area credit unions, the $37 million Space City andthe $20 million Independence Parkway FCU of La Porte, Texas, areplotting a merger this summer.

The proposed combination of the two healthy credit unionsrepresents perhaps a special phase in mergers of small equals,declared Craig Rohden, president/CEO of Space City, the expectedsurvivor of the consolidation.

Discussions have been under way between the two competitors forseveral months, said Rohden, noting only a preliminary agreementhas been signed with the credit unions.

Eventually, the proposed merger would require full member andregulatory approval.

“I think it is important to remember that it is not just the$300-$400 million credit unions that are undertaking the mergersbut it is also credit unions of our size that see the viability incombined growth,” said Rohden.

Both CUs have similar capital ratios (Space City at 7.5% andIndependence at 10-11%) with well qualified staffs, said Rohden.Both credit unions have two branches with Space City serving 5,300members and Independence Parkway 2,700.

“This is a merger that comes at the right place and the righttime for both of us,” said Rohden.

The Independence Parkway consolidation, once approved, wouldfollow Space City's expected competion Saturday of the merger ofthe low-capital $1 million HHA FCU that serves the Houston HousingAuthority.

That takeover is one “where we had been approached byregulators,” said Rohden.