California Credit Union In P&A
Acting at the NCUA's behest, the $1.5 billion Western Federal Credit Union of Hawthorne, Calif. was the successful bidder last week to merge the failed $90 million Oakland Municipal Credit Union.
The purchase and assumption transaction represented the first formally announced NCUA deal in 2010. Terms were not disclosed.
The long-ailing Oakland Municipal, chartered in 1964 with 7,800 members, had been on the NCUA watch list since early last year with net worth ratio at 4.9% in the fourth quarter and delinquent loans at 14.39%. Its net income fell 689.9% in the fourth quarter, following a 272.8% decline in the third quarter.
Christine Klein, executive vice president of Western FCU, said the NCUA had queried the southern California CU of its interest in bidding on Oakland "and we said we would take a look and decided it did fit well into our business model of serving municipal employees in Ventura County as well as in the Oakland area where we have a branch in San Bruno."
In a news release citing the culmination of the merger, Western noted that OMCU, which served employees for the city and port of Oakland, the Oakland Housing Authority and AC Transit, "had been struggling financially due to the downturn in the economy and working closely with NCUA and the California Department of Financial Institutions to find a partner."
John Bommarito, CEO of Western, said that "extending service to OMCU members is consistent with Western's business model of diversifying its field of membership to ensure the long-term financial stability of the organization."
Western, he said, currently serves the city of Oxnard and "is working with a number of government municipalities to offer Western membership to their employees as well."
Western has more than 127,000 members, 31 branch locations in nine states and had been the primary sponsor for the defunct Western Airlines but also has served employees of TRW Corp. now part of Northrop Grumman.
In 2009, Western merged Channel Islands CU, which also serves a base of municipal employees "and so we have that experience to draw from," said Klein.