Tech CU Expands FOM With Changing Times

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SAN JOSE, Calif.-The CU known today as Technology Credit Union has seen a slew of changes over its five-plus decades, morphing from a single-sponsor CU to one of the larger credit unions in the country with $1.5 billion in assets.

Today, Tech CU has a combined geographic and workplace charter. Membership is open to residents of several counties in the San Francisco Bay Area, but Harold Roundtree, SVP of retail banking, told Credit Union Journal its focus is on the "tech ecosystem," meaning technology companies that inhabit the region and their employees.

"Because the tech industry has expanded beyond the Silicon Valley to the entire Bay Area and all over California, we need to be able to support the needs of our membership outside the historic 'Silicon Valley' borders of the South Bay," he explained.

Tech CU was founded by employees of the Fairchild Camera and Instrument Semi-Conductor division as Fairchild Semiconductor FCU in 1960. It saw steady membership growth from its founding to the mid-eighties, Roundtree said.

In 1975, a merger with Advance Memory Systems' Credit Union broadened the membership base. Intersil became its second sponsor/member company. The CU name changed to Fairchild/Electronics Federal Credit Union to include members employed at companies other than Fairchild.

In 1983, the board decided the credit union had grown beyond the point of serving a few companies and had the potential to continue to grow and serve a greater part of the technology professionals working in the Silicon Valley. The name was changed to Technology Federal Credit Union and a concerted effort began to expand the franchise to serve more technology-based employee groups.

Technology FCU became part of the largest credit union merger in history to date in 1987, when the Electronics Association of California made a decision to merge with the American Electronics Association (AEA). The credit union for the Electronics Association of California, aware that its sponsoring association was about to be absorbed by AEA, looked for a merger partner and chose Tech FCU.

"The next big growth phase in membership came in the late 1990s, when the board and management made the decision to request a charter issued by the State of California, which is less restrictive in the area of field of membership," said Roundtree. "The membership approved the charter change and the move to a California regulatory environment, resulting in a name change to Technology Credit Union and renewed freedom to serve more technology-based companies in 1998. Technology Credit Union added 120 new technology-based employee groups in the last two months of the year."

Positive Effect Of HR 1151

According to Roundtree, another event in 1998, the passage of the Credit Union Membership Access Act, has worked out well for Tech CU and the credit union movement as a whole.

"HR 1151 has enabled credit unions to expand their footprint to cover a larger area," he said. "In the case of Tech Credit Union, this has worked well because our target market-the tech ecosystem-has grown beyond the South Bay geography where it was historically concentrated. Again, a more open charter gives us the ability to better serve the needs of that larger community which is our membership base, spread throughout the five counties of the Bay Area and beyond."

In 2008 Tech CU posted a loss of $3.1 million as it placed $7.8 million in its allowance for loan losses. Its 2009 loss was $9 million as ALL ballooned to $23 million.

In 2010 it bounced back with $5.5 million in net income before assessments. It paid $1.4 million to the NCUSIF and $1.6 million to the corporate stabilization fund, leaving it with net income of $2.5 million.

In the first quarter it had net income of $1.2 million. Its net worth ratio was 10.44%, making it "Well Capitalized."

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