OAKLAND, Calif. – NCUA reported this morning it approved a request by $1.7 billion Chevron FCU to acquire San Francisco’s Spectrum FCU, the $175 million credit union for employees of construction giant Bechtel Corp., in the latest consolidation of the state’s biggest credit unions.
Lynn Athens president of Spectrum, noted that its 10% growth over the last year has diluted its net worth ratio all the way to 5.1%, meaning it would have required some negative steps, like cutting dividends to build back to the 7% well-capitalized ratio favored by NCUA, and the nearby Chevron FCU appeared as a good merger partner. She added that Bechtel, which helped build some of the world's iconic structures, like Hoover Dam, the English Channel tunnel and Boston's Big Dig harbor tunnel, has been a good corporate sponsor through the years.
The merger is the latest in a series of deals that have remade the credit union landscape in California, home to many of the country’s biggest credit unions. Over the past two years Addison Avenue FCU has merged with Oregon’s First Tech CU; San Diego’s USA FCU has been acquired by Virginia’s Navy FCU; the Disney credit union in California has combined with the Disney credit union in Orlando; and two Los Angeles area credit union giants Kinecta FCU and NuVision FCU are merging.
Several more big California credit unions have been claimed by failure.
The latest deal will give Chevron FCU new branches in San Francisco, Houston and two in the Washington, D.C., suburb of Frederick, Md., where Bechtel has large workforce contingents. Chevron acquired another Houston branch last year when it merged tiny Stewart FCU in Houston. It also merged tiny Star Energy CU in Bakersfield, Calif., last year.
Both Chevron and Spectrum reported slight losses for 2011 due entirely to the funds they paid to NCUA for the corporate credit union bailout. Chevron reported a $184,000 loss for the year after paying NCUA $3.5 million for its bailout assessment. Spectrum reported a small loss of $68,000 for 2011 due to the bailout charge.
