The head of a Seattle credit union bypassed in the merger process to take over a failed but small competitor expressed disappointment today at the outcome but said he still supports the final result of protecting members.
Commenting on the state and NCUA-engineered takeover of the $27 million Transportation Northwest CU by the $4 billion Alaska USA FCU, Tom Graves, president/CEO of Prevail CU, said some steps in the NCUA process of awarding the final bid to the Anchorage CU appeared puzzling "and beyond my scope of experience with this sort of thing."
Nonetheless, Prevail's board had "done its due diligence in making plans over the summer to merge" the long ailing Seattle CU, which had capital below 1% and suffered huge real estate losses over the last two years. Transportation had been managed by Prevail in line with an April consent order issued by the Washington Division of Financial Institutions to find a partner.
In the final rundown, however, "when we asked to receive financial assistance on the loan losses," the NCUA suddenly switched to a bidding process, Graves said. The agency formally named Alaska as the winning bidder in August.
Alaska USA formally announced completion of the Transportation consolidation last Friday as part of its "diversification and growth strategy" to expand into Washington State. Earlier it merged two ailing California CUs and bought five branches of NCUA-conserved Arrowhead Central CU of San Bernardino.
"I am getting an education on how this process works but not sure our experience is much different as what happened in Utah," Graves said, alluding to out-of-state CUs expanding footprints in that state through voluntary and involuntary mergers. Graves stressed, however, that Alaska USA is very much a dominant player in Washington State since "it is the second largest indirect lender."
