DALLAS, TX ? TNB Card Services has purchased the credit card portfolios of four more credit unions in two states, and will operate those card programs through its agent issuer organization. AssetExchange was the broker for all four of the purchases. TNB has bought more than 60 portfolios since it began the agent issuer program in late 2002.
Selling their portfolios were Arizona credit unions Banner Federal Credit Union and First Edition Community Credit Union of Phoenix, and Desert Energy Credit Union of Tucson. In Missouri, TNB bought the card program of City Credit Union of Independence.
?The credit unions involved in our latest portfolio acquisitions, like so many others before them, are choosing TNB as their buyer for several very good reasons,? said Rollie Penn, executive vice president of TNB Card Services. ?The fact we are owned and directed by credit unions is a major factor, as well as the fair prices we offer, our strong reputation as a partner, and our marketing programs that not only build the portfolios but promote the credit unions as well.?
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Banner Federal Credit Union, based in Phoenix, Arizona, began in 1957 as Good Samaritan Employees Federal Credit Union. It now represents all employees and their families associated with Banner Health. The credit union has five branches, all in Maricopa County, with more than 10,000 members and assets of $46 million.
A stagnant portfolio and concerns about potential liability motivated Banner to sell its card program, said Roger Swanson, president and CEO of the credit union.
?The main driver was to get out from underneath potential liability. We had tried to grow the portfolio for two years, but it wasn?t happening,? Swanson said. ?We ended up with TNB because of their credit union ownership.
?Everybody wins. TNB has purchased a good portfolio of well-performing loans, and my members get higher credit limits and lower interest rates. We get a card that is still branded as a Banner card, plus we made money on the sale,? Swanson added.
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First Edition Community Credit Union of Phoenix, Arizona, began in 1952 by serving employees of the Arizona Republic newspaper. It expanded its membership to other media companies over the years, and in 2004 was community chartered, serving the northern half of the Phoenix metropolitan area. With 8,000 members, it has assets of nearly $50 million.
John Cassise, president and CEO of First Edition, said choosing between companies interested in buying the credit union?s portfolio was easy, especially since TNB was its longtime processor.
?On every point, TNB excelled,? Cassise said. ?Their bid for our portfolio was the highest. Since they were already our processor, we knew the conversion would be nearly seamless. They also had a demonstrated track record of good member service, and their plans for marketing to our membership excelled compared with the other companies bidding.?
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Desert Energy Credit Union of Tucson, Arizona, is a 68-year-old state chartered institution that serves Tucson Electronic Power and other utilities, along with residents of parts of Tucson and northern Arizona. The credit union has four branches, 7,200 members, and more than $50 million in assets.
Before making a final choice about whether to sell its portfolio to TNB, Desert Energy Credit Union surveyed its members on what is most important to them about a card program. Members identified interest rates and fees as the top issues, and in those areas, TNB was clearly the strongest candidate, said Linda Dhaemers, president and CEO of Desert Energy Credit Union.
?We also liked the fact that TNB is credit union-owned,? Dhaemers said. ?Now we are definitely going to have a better product for our members. They will have choices in cards at a good interest rate, and we will be able to offer Platinum, Family Account, and Business cards. At our size, for us to maintain on our own half a dozen different cards just wouldn?t have been feasible.?
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City Credit Union of Independence, Missouri, is a 45-year-old institution with more than 4,250 members and assets of $17 million. The credit union began with a focus on Independence Power and Light, which it still serves, along with Independence city employees and several other employee groups. The credit union also serves several portions of Independence.
Steve Knudsen, president, said City Credit Union had been considering a portfolio sale for about three years before the purchase by TNB.
?We are not big enough to carry the potential loss that can be involved with a card program,? Knudsen said. He added that he is looking for TNB to provide ?a better choice for the members, as well as reduced losses and hassles for the credit union.?
