In a calculated expansion plan described as "50 years in the making," the $1.6 billion Texas Dow Employees Credit Union disclosed Tuesday it has signed a letter of intent to merge the $80 million Bluebonnet Credit Union of Houston, giving it a bigger footprint in the state's largest city.
Edward Speed, president/CEO of the Lake Jackson credit union, told Credit Union Times his CU already has more than 10,000 members in metro Houston, more than $100 million in loans and more than $90 million in deposits "and already had an aggressive plan to move into Houston" before the Bluebonnet merger bid surfaced.
The opportunity to merge Bluebonnet, which has branches in Houston and Baytown and serves employees of Gulf Oil Chemical, "just jump starts that move," Speed said.
"Not only will we want to keep all employees including Charles McGuire, its CEO, but we are going to need more as we plan to add at least three branches to Bluebonnet's four existing branches within 12 months after we complete the merger," he said.
The merger with Bluebonnet "will bring TDECU up to 30 branches in 2012 and because of the branch locations, our field of membership will cover all of Houston, a metro population of over 3 million or a 10-mile radius from each branch," said Speed. describing Bluebonnet as holding a "squeaky clean loan portfolio."
He said the credit union is well run though it did experience a $500,000 loss from CD funding in 2010. Bluebonnet currently has a net worth of 6.7%, he said.
Maguire said in a statement, "This partnership is a terrific opportunity to create more value for our combined memberships. While there is more due diligence ahead, our initial analysis suggests a merger would enhance the capabilities of the combined credit union moving forward."
Speed added, "With our board's approval of the letter of intent, this begins the formal due diligence process that will allow TDECU and BBCU to begin a series of meetings and third-party evaluations. BBCU had a number of potential merger partners from which to choose. We are truly honored that BBCU would consider us as the entity they would like to have care for their members and employees in the future."
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