Both Dan Paulson of the Henderson, Nev.-based WestStar and Tony Mook of the Las Vegas-based Cumorah, were let go on the same day, Oct. 5. Both credit unions have labored for months under the pall of large real estate losses. Paulson and Mook have served lengthy periods with their credit unions and as chairmen of the Nevada Credit Union League.
Their departures came in the wake of ongoing financial difficulties for Nevada credit unions as large casinos, hotels and their suppliers shed employees in response to a depressed tourist-based economy. In addition to a bank failure, there have been two Nevada credit union purchase and assumption deals arranged by the NCUA within the last three months.
WestStar, in replacing Paulson, named Andy Baumann, former NCUA supervisor, as interim CEO. WestStar, known as "the gaming employees' credit union" had lost $4.3 million in the first half of this year.
Baumann said he is not sure if the board fired Paulson or if he resigned but did say his own role is only temporary and that volunteers are searching for a permanent replacement.
"This isn't a case of a Camel 4 credit union," Baumann said of WestStar, noting that it had reported 8.5% net worth as of Aug. 31. "Loan losses are up from previous years, but capital is still strong," he said.
WestStar has not turned a profit since December 2007, and ended 2008 with a $6.4 million net loss. WestStar losses were driven primarily by a $4 million loan-loss provision. The credit union has charged off roughly $2.5 million so far this year.
Paulson, who served as chairman of the Nevada league last year, has been in the CU field since 1975. He has been WestStar CEO since 1997.
Meanwhile, Cumorah, which lost $7.3 million during the first half of this year and held a net worth of 3.4%, said its 19-year credit union veteran, Mook, had resigned effective immediately. He was replaced by an interim CEO Paul Simons, who is currently CEO of the Rantoul, Ill.-based Credit Union 1.
Simons was selected by the Cumorah board with the help of its private deposit insurer, American Share Insurance. American Share President/CEO Dennis Adams, said Mook's exit was an expeditious one following "the very serious real estate challenges" that have gripped Cumorah and other Nevada credit unions for months.
Still, said Adams, he and the Cumorah board are very comfortable with the selection of Simons, who has performed workout duty on several occasions over the years wearing two CEO hats.
"He is dependable, knowledgeable and has an outstanding performance record over 35 years in credit union management," said Adams, adding that he was grateful the Illinois executive "could afford this kind of short-term commitment."
He said he had no idea how long it might take before a permanent CEO is found but that Cumorah is being put on the right track, adding that the other privately insured Nevada CUs serviced by American Share all face similar challenges as Cumorah.
Both Mook and Simons had served on American Share's advisory panels, with Mook stepping down earlier this year.
Simons told The Las Vegas Review Journal that his downstate Illinois CU has no plans to merge with Cumorah and that the Cumorah board must now "weigh its options, hiring a permanent CEO or alternately merging with another credit union."
He said Steele Hendrix, vice president of Cumorah, is in charge of day-to-day operations.
Cumorah, chartered in 1965, serves members of the Church of Jesus Christ of Latter-day Saints.
Correspondent Heather Anderson contributed to this article.