Problems of CEO Search Seen in N.M. Merger
The travails of small credit unions recruiting available CEO talent at reasonable cost is being underscored this week in a New Mexico merger involving the $101 million Animas CU consolidating the struggling $5 million Totah CU, both of Farmington.
"Yes, indeed.Totah was financially ailing and came to us seeking a merger after they lost their CEO and found themselves unable to attract talent at a reasonable price," explained Gary Sterton, CEO of Animas CU.
Animas is completing computer conversions in March and April for the merger that was made effective Dec. 31. Totah, which had a 40% loan to share ratio, saw its losses widen to $348,000 through the first nine months on top of a $29,000 loss in 2008.
There are many CUs of Totah's size that "simply can't afford to attract qualified talent," said Sterton, who is a director of the Credit Association of New Mexico. Animas, with two offices in Farmington, has closed the Totah facility which was not needed since there is an existing office close by.
Animas itself, said Sterton, has managed to stay profitable in 2009 The CU has a 8.97% capital ratio "maybe a little below our peers but we're doing OK," he said.
In a separate comment on a bill progressing in the New Mexico legislature to move state funds into small banks and CUs, Sterton asked "Isn't that great to have our money stay in New Mexico rather than go to New York?" Or better yet, he said, than having CUs lose their shares on WesCorp or sending funds off to pay the NCUA corporate tab.