Marking its second merger bid into the Houston market in just over a month, the $1.6 billion Texas Dow Employees Credit Union announced Thursday an agreement in principle to consolidate the ailing $60 million San Jacinto Area CU of Pasadena, Texas.
Signing a letter of intent with the SJACU board, Edward C. Speed, president/CEO of Texas Dow of Lake Jackson, said the proposed merger is line with the CU's expansion strategy of reaching into the Houston market for additional loan and member growth and finding like-minded CUs that serve employees in the petro-chemical industry.
"TDECU is honored that SJACU has selected TDECU for a merger partner and what is terrific is that SJACU looks just like us in history and primary membership," Speed said.
Last month TDECU said it was embarking on its first major foray into Houston, a move Speed called "50 years in the making", by signing a similar letter of intent with the board of the $80 million Bluebonnet CU. That proposed merger is currently pending with regulatory agencies and subject to member approval.
Speed said no other merger deals are in active discussion right now. But, "if we were to enter into additional discussions, we would really be attractive to CUs in the petrochemical industry and especially those which have strong identity with their roots in their early fields of membership," he said.
He added, "It is our experience that both Bluebonnet and San Jacinto retain deep employee loyalty with those employees devoted to helping their members," and that makes joining "the cultures" that much easier.
Speed said due diligence on the Bluebonnet merger is continuing satisfactorily. "We are ahead of schedule and Bluebonnet is in great shape," he said.
The two boards have "formed a joint transition committee and our joint employees meet frequently and this is definitely a 'go'," the TDECU CEO said.
The struggling, 8,000-member San Jacinto credit union lost $295,000 in 2010 and $55,000 in the first quarter and has a net worth of 3.39%.
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