The $3 billion Catalyst Corporate FCU Monday announced the completion of itspurchase and assumption the Phoenix-based First Corporate Credit Union, a so-called “pass-through”corporate that struggled to replace key services provided by U.S.Central FCU.

Forty two of the 48 former FirstCorp members elected to stickwith Catalyst, a number the Plano, Texas-based corporate saidexceeded the expectations laid out in the original businessplan.

“Right out of the gate, we had several key challenges toaddress,” said Catalyst President/CEO Kathy Garner. “The first ofthese was to convert FirstCorp's members to Catalyst's ACHsolutions quickly, given the impending discontinuation of U.S.Central's APEX-ACH,” she said. The ACH conversions began withinweeks of the initial consolidation announcement. “While theserapid-fire conversions were operationally challenging, they werefamiliar territory for our seasoned staff,” she continued.

Catalyst has merged or acquired three corporates in just under14 months, beginning with a merger with Georgia Corporate FCU inSeptember 2011 and the July 2012 acquisition of Western BridgeCorporate FCU.

“In the case of the FirstCorp consolidation, the mostchallenging operational element may have been the compressed timeline,” Garner said. “There are always bumps in the road during theintegration planning process. Regardless of what we encountered,Catalyst was committed to moving ahead in a manner that was leastdisruptive to FirstCorp members, which meant creative thinking andsome extra legwork upfront.”

The structure of the purchase and assumption could be auseful model for future corporate consolidations, Garnersaid. By its very nature, a purchase and assumptiontransaction allowed Catalyst to choose which FirstCorp assets toacquire, she said, rather than assuming all assets, liabilities andcapital as would be the case in a merger.

“It was necessary to develop a plan that would insulateCatalyst's membership from risks posed by the legacy assets on theFirstCorp balance sheet. Taking on any risk was not an acceptableoutcome for us,” Garner said.

FirstCorp will retain its existing state charter withoutfederal insurance, where its legacy assets can remain untilmaturity or be sold if the opportunity arises. The charter isexpected to continue operating for up to seven years, by which timethe majority of FirstCorp's legacy assets will have matured or paiddown substantially.

Catalyst Corporate and its wholly owned credit union serviceorganization, Catalyst Strategic Solutions, provide wholesalefinancial services to credit unions in 20 states, with offices inDuluth, Ga., Honolulu and Ontario, Calif.

The corporate now counts 1,284 capitalized member creditunions.