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By CLAUDE R. MARXand JIM RUBENSTEINThe impact of the recession on Nevada’s already battered economy was again evident when the NCUA closed Ensign Federal Credit Union and authorized EDS Credit Union to buy its shares and assets.Ensign’s latest financial report, which covers the third quarter, showed a net worth ratio of negative 1.21% and equity of negative $1.1 million.The 7,900-member Henderson, Nev.-based credit union saw its assets fall by $23.5 million during 2009, from $121.5 million to $98 million. During the third quarter, its loan income declined 3% and its investment income fell 26.7%. According to the report the credit union filed with the NCUA, 13.6% of its loans were delinquent at the end of September, up from 6.27% in September 2008.Ensign FCU, the fourth credit union to close in Nevada this year because of the recession, was founded in 1961 to serve members of the Church of Jesus Christ of Latter Day Saints. In 2009, 13 federally insured credit unions have been liquidated so far.EDS CU, based in Plano, Texas, has $772 million in assets.Kent Lugrand, the president/CEO of the credit union said the deal fits well into a long-term branding strategy of employing the newly minted “InTouch” name as EDS pursues “a national trademark which we’ve applied for” with federal agencies last year.He added that Ensign’s “brand charter” was very much in alignment with that of EDS’ and the credit union chose to acquire Ensign because it fits with EDS’ geographic diversification strategy.EDS CU, originally formed by employees of Ross Perot’s old Electronic Data Systems (now owned by Hewlett Packard Corp.) has members in all 50 states, giving it a national footprint for the “InTouch” brand, said Lugrand. He said he hopes to win approval for the InTouch name from the Texas Credit Union Department by year-end and then await later trademark clearance from the U.S. Patent Office.EDS CU has 66,000 members and 15 branches. It plans to keep all of Ensign’s employees and branches and even plans to reopen an Ensign branch in Las Vegas that was closed last summer.In comments made to Credit Union Times, Lugrand noted that EDS has more than $66 million in capital, earned $5.6 million in net income through the first three quarters of 2009 and forecast its 8% capital ratio “should remain” at that level after the Ensign acquisition.Lugrand said his credit union was approached by the NCUA last July and suspected “there were perhaps more than half a dozen other bidders, though I don’t know for sure.”The NCUA declined to discuss details of the negotiations.In a message on the EDS Web site (edscu.org), outgoing Ensign CEO Diane Whitaker said the credit union faced daunting challenges in the local economy, “including the dramatic decrease in home values and negative impact of unemployment” reported most recently as topping 15%.–[email protected][email protected]

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