This page contains a single entry from the blog posted on March 10, 2010 4:57 PM. The previous post in this blog was Cogen to be crowned. The next post in this blog is Sunny, yesterday my life was filled with rain. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Wednesday, March 10, 2010

First Tech gets engaged

One of the four local credit unions that we've been following in our quarterly review of their operating results is merging. First Tech is set to merge with Addison Avenue Federal Credit Union of Palo Alto, and the combined entity will be called First Tech Federal Credit Union. The two parties to the merger are of roughly equal size.

Of the local outfits that we've been watching, lately First Tech has appeared to be the strongest or the second-strongest, depending on how one measures.

Comments (9)

That's my credit union and I LOVE it. Wonderful customer service. I hope this is good news.

Mine too -- and have admired and availed myself of their expertise since way back in the Tektronix era.

Of course I'm not thrilled by their offering of "...new innovative products and services..." in their press release. Isn't that new and innovative stuff what kind'a blew up, economywise? And while I'm grumbling, Banks and insurance companies offer services. Unless they have some toasters or clarinets, they are not selling products and instruments. Calling them products reminds me of fundies and their creation science. If ya' have to attach the word science to what you are doing to seem respectable....

It's my credit union too. I am not totally thrilled with some things about them but they beat the hell out of Stank of America (my last financial (using the term loosely here) institution that I fired a number of years ago).

I'm wary. First Tech has been pretty innovative (2nd credit union to offer online banking) and good at doing the right thing in the past (focusing on retail banking and good loan rates).

A quick glance at Addison's site shows worse rates than First Tech. Couple with the fact that Addison is bigger, and First Tech's CEO is retiring, it seems likely that Addison will be calling the shots if the merger goes through.

Wary about the merger

- merger of equals (sort of: FTCU 2.2 billion vs. Addison 2.5 billion)

- Merged CU still in used shared branching? If not, FTFCU is done.

- layoffs in the backend, may not be right after the merger...but down the road (within 10 years) layoffs will occurs with their admin/back office.

- FTCU rates are generally superior compared to Addison Avenue (by 25%,) exception is CDs (slightly worse.)

- Addison avenue do QUARTERLY statements.

I'm on the other side of this merger as a member of Addison Ave. Addison is the former HP Employees FCU. I've always been happy with their service but their overall organizational trend seems to be moving towards just another financial institution since the name change. The newsletter and other mailings look like everyone else's and lack the kind of community that used to be there. Looking at First Tech's About Us page, it appears to be the same but with a more acquisitive focus. I'd prefer my CU to stick to itself and focus on the membership base.

I've been a member of Addison for over 20 years, but used Washington Mutual for checking and the like. The "Wamu" rebranding really pushed me away and the Chase takeover sealed the deal after 25 years with them & their previous banks. The name First Tech alone is making me think about changing again.

One diff is that the new merged CU will have a federal charter, not the state charter 1st tech currently has.

This means, among other things, the more restrictive federal rule for credit nion membership. Right now anyone who lives in WA can join 1st tech. Not any more if the merger goes thru. Existing WA members will be grandfathered in.

However those individuals aren't a big share of 1st tech's member base. Our big member base in WA is microsoft members and other employees of affiliated (high-tech) companies.

Disclosure: I am a 1st tech back-office employee.

As a long time First Tech member, I see only negatives and no positives in this merger.

1) Bankrate.com rates First Tech as 3 stars out of 5 and Addison as 2 stars. Why would we want Addison's management?

2) Having management and headquarters out of state can't possibly benefit current First Tech members.

3) Mergers and reorganizations cost money and seldom provide value to customers.

4) Any savings from consolidation are likely to be from job cuts in Oregon since the headquarters will no longer be here.

5) The influence of First Tech members will be diluted from 100% in the current structure to less than 50% of the new company. Local issues may be driven by the Addison membership majority.

6) As the second largest credit union in the state of Oregon, First Tech doesn't need to grow like this. They have been leading edge in member services as it is and I can't see a single way in which services will be improved and there's lot of potential for out of state management to make things worse, particularly in light of item #1.

To be honest, this merger makes so little sense, from a member standpoint, that it makes me question the viability of the current First Tech board of directors. I don't know who they're looking out for, but it's not us!

There's an interesting article in The Oregonian this morning about credit unions and some of the troubles they are facing.


Some of the comments posted here have me thinking about things I formerly took for granted.

First Tech's customer service is superior in every way to any bank I have been with. They greet me by name, they ask about my family - whom they also know by name, and when I had a dispute with my mega-mortgage corporation over whether or not I had made a late payment, they got on the horn and helped iron out the situation (specifically, Shelly at the Lloyd branch). So, as a very, very satisfied customer, I hope things do not go awry.

Clicky Web Analytics