California's central valley economy "may be as bad as it gets," but that has not precluded the $317 million Valley First Credit Union of Modesto from becoming the successful bidder for the failed $28 million Tracy FCU, its president/CEO Henry Barrett said Tuesday.
Valley First with 10% capital has suffered significant loan losses like scores of its California brethren, and yet the Modesto CU is gratified to "take advantage of this opportunity as well as others which have come our way in terms of bank properties," Barrett told Credit Union Times.
The NCUA placed Tracy into conservatorship on Friday after asking Valley First to bid on the CU, which will become Valley First's eighth branch.
While Valley First has seen "some of our loans getting munched on" in the auto and Visa sector, the Modesto CU has avoided getting into faulty mortgages "sticking carefully to our mortgage model," said Barrett.
Late last year Valley merged with the $2.2 million Yosemite CU giving Valley an entry to the 3,000 employees of the National Park Service. Valley First now manages the major ATM operation at the site, displacing Bank of America, which previously had the contract.
"We also took over some former bank branches, and it may be tough times but we are having fun," said Barrett.