BEAVERTON, Ore. – In proposing to combine with Addison Avenue FCU, First Tech CU is trying again at a concept it tried in the early 1990s – the marriage of credit union giants.
A 1994 plan to combine First Tech with Seattle Telco FCU and Patelco CU in the biggest credit union merger to that point fell apart after the various regulators indicated a predisposition to deny the application. Among those standing in the way was NCUA, where its then Chairman Norm D’Amours was not ready to approve the deal proposed by one of his predecessors at NCUA, Ed Callahan, who was then president of Patelco. In those days the three-way combination, which would have created a credit union with just more than $1 billion in assets, was considered huge.
In the interim years First Tech did grow by mergers, albeit smaller ones. In 2002 it merged with State Employees CU and in 2004 with Oregon Metro CU, creating a credit union today with $2.2 billion in assets and 165,000 members.
Sixteen years later First Tech is going to try again to create the biggest credit union combination, this time with Addison Avenue FCU, which also is a credit union representing high tech companies. This may present to regulators a better fit than the Patelco proposal in 1994.
The proposed Addison Avenue/First Tech marriage would create a credit union with almost $5 billion in assets, 320,000 members and 38 branches. The continuing credit union would use Addison Avenue’s current federal charter with the addition of First Tech’s current fields of membership. Reflective of its heritage in serving high-tech companies and their employees, the combined credit union would operate as First Tech FCU with corporate offices in Palo Alto, Calif., Beaverton, Ore., and Rocklin, Calif. It will serve such major west coast employers as Hewlett Packard, Microsoft, Agilent, Intel, CH2M HILL, and Nike.
"This is not only a merger of equals in terms of size," stated John Weidert, chairman of the board at Addison Avenue, "but our organizations also share common heritage, strategy, and operations, making this a compelling partnership to better serve our combined membership."
Addison Avenue was originally Hewlett-Packard FCU but changed its name five years ago to recognize the address where David Packard and Ron Hewlett created their technology company in 1939. The credit union has grown to be one of the most successful credit unions in the country with $2.5 billion in assets serving hundreds of Silicon Valley tech companies. The credit union earned net income of $1.5 million last year, after recording a $2.8 million charge for the corporate credit union bailout.
First Tech reported net income of $23.4 million for 2009.
