David Gunderson, president/CEO of the $575 million Credit Union of Southern California in Brea, warned that CUs in the state "face a longer road to recovery" than those in the rest of the country and are now looking more seriously at mergers. He cited the combined problems of a poor economy, higher taxes and a state budget impasse as major factors driving the trend.
He said CUs like his continue to be approached by regulators, consultants and CEOs about mergers prospects. "It isn't just the very weakest that are showing interest but the healthy ones which see benefits in gaining more branches, longer hours and higher levels of service," he said.
Meanwhile, CUs in the hard-hit San Bernardino-Riverside area were preparing to mount new member marketing campaigns following the July 17 failure of two large southern California banks.
"Our executive team has scheduled a meeting to discuss opportunities," said Ricki McManuis, senior vice president of corporate communications at the $908 million Altura CU of Riverside.
The two banks that failed, Vineyard Bank, Rancho Cucamonga, and Temecula Valley Bank, Temecula, had both run into real estate loan problems.
"It's still early yet to gauge the impact" of the failures, said McManuis, but the CU does plan to examine "what course our credit union can take." The FDIC, named as receiver in both cases, sold all of Vineyard's retail deposits to California Bank & Trust of San Diego, a subsidiary of Zions Bancorp of Utah. Temecula Valley's deposits went to First-Citizens Bank and Trust of Raleigh, N.C.
Regarding the possibility of more CU mergers in the state, Gunderson said his own CU "now is having active discussions" with other CUs, but he declined to identify any of the parties or motivation.