Having now won regulatory approval, the $4 billion Alaska USA Federal Credit Union of Anchorage and the ailing $875 million Arrowhead Credit Union of San Bernardino, Calif. disclosed Wednesday they will begin implementing the sale of five Arrowhead branches starting this weekend.
Terms of the transaction announced in March and involving loans and branch property are altered slightly to give Arrowhead share account holders a choice whether to stick with Arrowhead or switch to Alaska USA.
The original spinoff agreement shifted the deposit portfolio directly to Alaska USA but computer hang-ups on duplicate account conversions delayed completion of the deal, said CU officials.
"We're both on Symitar and we thought it would be easy but we ran into all kinds of roadblocks in merging separate accounts of members," explained Larry R. Sharp, Arrowhead president/CEO detailing the new timetable for completion of the transaction, done originally to help bolster's Arrowhead's sagging financial condition.
Under the revised deal, the actual switch of the five branches located in California's High Desert area and Big Bear, will take place this Saturday but members have until Aug. 31 to pick their CU for share accounts.
"Until Aug. 31 we will be handling accounts from both credit unions," said Sharp in also expressing satisfaction that the overall deal will aid Arrowhead's bottom line by 50 to 80 basis points increasing its net worth ratio from 3.65% to 4.65%. The CU, which lost $45 million last year, has shrunk in size, let go employees, and closed four other branches in addition to selling an insurance CUSO. "We have definitely improved and let me add we've made $4.7 million so far through April," said Sharp.
The five branches and member accounts being moved to Alaska USA are in Victorville, Apple Valley, Barstow, Hesperia and Big Bear.