TNB Card Services Adds $4 Million in Card Balances from Credit Union Card Portfolios

TNB Card Services has purchased the credit card programs of three more credit unions, in Pennsylvania, West Virginia, and South Dakota. It is currently converting the card portfolios to TNB’s agent issuing program, which will bring the number of card programs that credit union-owned TNB has purchased to more than 160 since launching its agent issuing program in 2002.

TNB’s latest acquisitions were the programs of 1st Choice Community Federal Credit Union of Pennsylvania, One Community Federal Credit Union of West Virginia, and Service First Federal Credit Union of South Dakota. With these three programs, TNB added more than $4.2 million in outstanding balances and nearly 4,500 card accounts to its agent issuing portfolio.

For 1st Choice Community Federal Credit Union, competitiveness was the key to its decision to sell its card program, according to CEO Kim Davis.

“Our credit card portfolio was on the decline, so we decided to evaluate different options that would help our members as well as grow our portfolio,” Davis said. “We had a flat rate card with no rewards, so we really weren’t competitive. By selling, we hope to be able to offer a better card product that will be more appealing to our members.”

Davis said the 67-year-old credit union, which serves residents of Erie and Crawford counties in northwestern Pennsylvania, will use proceeds from the sale of the card program to deploy an online ATM capability and allow it to offer additional services to its 5,000 members.

The chance to add to its liquidity and avoiding fraud risk were the motivators for One Community Federal Credit Union of Parkersburg, West Virginia, to sell its credit card program.

“Liquidity was our biggest concern, as we had exhausted ours on mortgage loans,” explained CEO Randy Brooks. “Fraud was another issue. Although we hadn’t had fraud problems, the growing risk and cost of bond coverage was becoming a concern for us. By selling the program, we resolved both of these issues, and we expect our cardholders will get better service as well.”

Brooks noted that he consulted with another West Virginia credit union that sold its program to TNB in 2007, and the positive comments he heard convinced One Community FCU to go with TNB. The credit union, serving residents of Wood County, West Virginia, has 7,650 members and assets of $60 million.

Service First Federal Credit Union of Sioux Falls, South Dakota, badly wanted its card program to grow, but couldn’t achieve that goal on its own, said President Roger Peters.

“We hadn’t seen growth in the portfolio in a few years, and although we wanted it to grow, we just don’t have the resources or experience to accomplish that,” Peters said. “We have been conservative, and haven’t done much in the way of promotions. By selling, our members can get better rates and credit limits, and have more options.”

Service First FCU was already doing its processing with TNB, Peters added, so it felt it was selling its portfolio to a trusted partner. The 74-year-old credit union, with 17,000 members and $132 million in assets, is community chartered for Minnehaha, Lincoln, and McCook counties in South Dakota.

About TNB Card Services
TNB Card Services, owned and directed by credit unions since 1976, provides electronic payments processing, as well as an agent issuing solution for credit unions nationwide. Serving more than 550 financial institutions of all sizes and managing more than 2 million cards, Dallas-based TNB enables credit unions to enhance member loyalty through credit union-branded card products. For more information about TNB, go to www.tnbcard.com or call Mark Fenner at 1-800-422-0733 ext. 6655. TNB’s credit cards are issued by Town North Bank Nevada, N.A.