PenFed plans expansion in Texas

Pentagon Federal Credit Union in McLean, Va., plans to open a new facility in San Antonio, Texas, that will house several management functions.

The office will “significantly increase” the credit union’s local workforce. It currently has two branches in San Antonio. The new facility, which should create almost 600 new jobs, will be home to several executive managers in research, mortgage and loan operations, service center operations, collections and human resources, the $24.1 billion-asset institution said Friday.

The decision to expand in San Antonio follows PenFed’s acquisition of the $383 million-asset Progressive Credit Union, which had an open charter, meaning anyone in the country can join the merged entity. Progressive, which was based in New York, had struggled in recent years after loading up on taxi medallion loans.

The merger, which was approved by the National Credit Union Administration under its authority to allow “emergency mergers,” was widely criticized by banking groups as it offered PenFed significant expansion opportunities.

PenFed has received a Texas Enterprise Fund grant to support the project. A press release issued by the Texas governor’s office said the grant would be valued at up to roughly $2.5 million, including a bonus for hiring military veterans. According to the governor’s office, these grants go “to companies considering a new project for which one Texas site is competing with other out-of-state sites.”

Bexar County, where San Antonio is the county seat, may also provide PenFed with a package of incentives in support of its local expansion.

The proposed center remains subject to pending incentive approvals from the San Antonio City Council, which will vote on the matter on Thursday.

“PenFed’s top priority for our new regional center was to locate in a pro-business, military-friendly state,” James Schenck, PenFed’s president and CEO, said in a statement.

San Antonio was chosen because the city and region offers a “highly skilled diverse talent pool” and “world-class amenities,” Schenck said.

Texas Gov. Greg Abbott stated that “with the creation of nearly 600 new jobs and over $48 million of capital investment, the economic impact of this new facility will be felt across San Antonio.”

PenFed posted net income of about $128.1 million through the first nine months of 2018, down about 20 percent from the same period in the prior year.