The $851 million Arrowhead Credit Union has sold it insurance subsidiary, Sawyer Cook Insurance, several publications recently reported.
Terms of the transaction, completed on Feb. 26, were not disclosed. Arrowhead CU President/CEO Larry Sharp was not available to respond to questions at press time. The San Bernardino, Calif.-based Sawyer Cook was sold to another unnamed insurance firm, according to a March 1, 2010 article in The Sun. Darrel Olson, president/CEO of Sawyer Cook, was unavailable to comment on the deal.
According to Sawyer Cook's Web site, the firm was founded in 1924 in Redlands, Calif. under the name of Dexter, Sawyer Real Estate & Insurance. In 1960, it merged with Richard Cook, the company under the new nameplate Sawyer Cook Insurance. Arrowhead brought the firm under its family of CUSOs in 2002 through the Arrowhead Financial Group. In addition to business, personal and marine insurance, the insurance firm also offered investment and financial planning services through the Arrowhead Investment Center.
Arrowhead CFO Daniel Marciante told The Sun that the Sawyer Cook sale will add $750,000 to the CU's projected profit for 2010. The insurance firm's buyer laid off nine employees but kept 13 on staff, the publication reported.
"It will stop losses to our bottom line," Marciante told the publication.
The sale is the latest in several cost-cutting moves for Arrowhead. In 2009, the CU closed four of its 28 branches and laid off nearly 60 employees. The San Bernardino, Calif.-based cooperative had to raise it capitalization ratio after state regulators discovered it was significantly undercapitalized. According to NCUA December 2009 call report data, the wholly owned CUSO Arrowhead Financial Group had total assets of $4.59 million and $22.82 million in total capital. The CUSO had a loss of $18.8 million.
After a ten-year run, Arrowhead shut down Arrowhead Trust Inc. in 2005. At the time, Sharp said the trust firm did not live up to financial expectations even after acquiring a bank's $300 million retirement plan portfolio.