Marking its first merger in three years, the $1.7 billion Redwood Credit Union of Santa Rosa, Calif. is expanding its local footprint by taking over the ailing $90 million Cal State Central CU effective April 1.
"This is a credit union that came to us at the beginning of the year inquiring about a merger and we thought it would be a strategic fit but we're not out there looking for credit unions to merge," stressed Brett Martinez, president/CEO of Redwood.
Cal State, with four branches and also with headquarters in Santa Rosa, has suffered two straight years of losses-$2.1 million in 2010 and $1.3 million in 2009. Its December call report showed 3.65% net worth.
Martinez said while the northern California economy "has hit bottom with signs of recovery" there remain struggling credit unions and his CU continues to field numerous inquiries from interested suitors and though "we would entertain those that are a match, we do our best to look out for" fellow CUs.
On another topic, Martinez, a member of the CUNA Board and past chairman of the California/Nevada Credit Union Leagues, acknowledged the industry disappointment in the NCUA rejection of a merger of Western Bridge Corp and Members United Bridge.
"This leaves us with a go-it-alone strategy and I guess we want to know whether NCUA rejected the idea for now or whether it was forever," observed Martinez, who also is a member of the league's Corporate Realignment Task Force.
The NCUA stance, he said, has thrown "a curve ball" at Western Bridge and so for the moment, "it looks like we have to go back to the drawing board."
Regarding the Cal State merger, a formal press release said directors of both CUs have approved the merger, and approvals from NCUA and the California Department of Financial Institutions are pending. The joining of the two CUs will result in RCU serving nearly 200,000 members in the North Bay and San Francisco, with assets exceeding $1.8 billion.
Besides its office in Santa Rosa, Cal State has branches in Sonoma, Glen Ellen and Rohnert Park.