FORT WORTH, Texas (10/15/13)--OmniAmerican Bank--which was a Fort Worth credit union until 2005--announced that it's laying off 24 workers after deciding to discontinue its indirect auto loan program.
The move comes as the bank attempts to implement cost-cutting measures, which include the elimination of the chief operating officer position. The bank said it was focusing resources on commercial, mortgage and retail banking and that it was taking the actions to reduce overall costs and increase efficiency, although it remains financially strong.
"Interest margin pressure and the competitive rate environment are impacting the profitability of banks across the nation," said Tim Carter, president/CEO.
OmniAmerican currently holds about $250 million in indirect auto loans--lines of credit that originate with car dealers. They make up about 30% of its total loan portfolio. The layoffs are roughly equivalent to 8% of the bank's 307 member work force (Fort Worth Star-Telegram Oct. 9).
OmniAmerican Bank used to be OmniAmerican CU, the second largest credit union in Fort Worth, until its members voted 3-to-1 to convert to a bank in July 2005 (News Now Feb. 13, 2007). In 2010, it floated its shares on NASDAQ after a $119 initial public offering, converting from a mutual savings bank to a publicly held company (News Now Jan. 22, 2010). The bank was founded as Carswell FCU in 1956 to serve Carswell Air Force Base.
The Credit Union National Association and the National Credit Union Administration maintain that converting to a bank charter won't benefit members (News Now May 9, 2012). Ultimately, the decision to convert a credit union to a bank must be made by the credit union's member owners, based on all the facts provided with complete transparency. Use the link to access CUNA's Principles on Credit Union to Bank Conversions.