OUR VIEWPOINT: TDECU’s latest merger makes business sense | Opinion

The announcement that TDECU would merge with another financial institution shouldn’t have surprised anyone. It follows the inorganic growth pattern the credit union has been following for better than a decade, scooping up or joining forces with smaller credit unions.

TDECU deciding to rebrand under the name of its latest merger partner, Space City Credit Union, and become Space City Financial is the shocking part. The action further angered longtime members already unhappy watching their little credit union mature into a financial services big boy.

Moving beyond nostalgia, though, the decision makes strong business sense. Companies that stand still tend to get run over, leaving TDECU with the decision to either run out front or get swallowed up by a bigger competitor, the latter likely bringing about the same fate of the TDECU name being no more.

The credit union, started by Brazosport-area Dow Chemical Co. employees, will celebrate its 70th anniversary next year. Longtime residents yearn for those good old days when it operated more like a small-town general store than a major financial institution and wish it still were the homey little bank they remember.

That nostalgia would not have gotten the credit union where it is today or allowed it to help build our communities.

Instead of loans like the first given to a member that was worth $35, TDECU now loans out hundreds of millions of dollars, allowing businesses to be created or expand, members to buy their first home or a bigger one and savers large and small to earn a respectable level of interest.

To accomplish that, it had to expand beyond the limits of Southern Brazoria County. Now, it has about three dozen member centers around Southeast Texas, mixing big-city locations with a continued presence in small towns such as Yoakum, Cuero and Hallettsville. Its growth strategy has made it the fourth-largest credit union in Texas, a ranking that could grow with its recently announced combinations with Sabine State Bank and Space City Credit Union.

This year’s acquisitions will result in the rebranded TDECU having about $6.2 billion in assets, the credit union said. The third-largest, American Airlines Federal Credit Union, had about $8.6 billion in assets at the end of 2023, according to the National Credit Union Service Organization.

The goal is for Space City Financial to be among the 20 largest credit unions in the nation in the next decade, which would require it to almost double its current assets.

“We must grow. If we do not grow, we will become one of those credit unions that are consumed or have decreasing membership,” TDECU President and CEO Isaac Johnson told the Houston Business Journal. “What we’re doing now is ensuring that we have an ongoing credit union for the next 100 years.”

The loss of the TDECU name and its primary focus being on its Southern Brazoria County roots is worth a note of sadness, but it’s hardly the first time the area has lost an iconic brand. Intermedics and its offshoot Benchmark Electronics abandoned Brazoria County, the sulfur and shrimping industries are shells of their former selves and once-thriving fig farms are distant memories. The county survived and further strived amid those changes, and will continue to do so regardless of how TDECU’s footprint and branding evolve.

Southern Brazoria County has prospered partly because of TDECU’s commitment to its residents. If the credit union rewards the loyalty of longtime members by continuing that local commitment, it will remain a thriving institution here, regardless of its name or the size of its portfolio.

This editorial was written by Michael Morris, managing editor of The Facts.

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