Some industry sources are privately pointing to the weekend conservatorship of the $139 million Family First FCU of Orem, Utah as signaling perhaps a new NCUA policy of protecting the NCUSIF as it bypassed big CUs as a merger suitor.
A sampling of CEOs involved in the merger process expressed puzzlement as to why the NCUA skipped selecting one of some five CUs, including several from Utah, which submitted merger bids for Family First.
Instead, the agency sent letters to the large CU suitors that it chose “a different avenue” for Family First. Thus Family First joins a list of troubled or failed small and medium size CUs that remain under NCUA management.
Ronald Burniske, president/CEO of the $1.8 billion Chartway FCU of Virginia Beach, Va., which has been recently successful in two NCUA-engineered Utah mergers, confirmed that his CU had submitted a bid for Family First.
While expressing disappointment at losing the bid, “we are working on some other things” with the NCUA, Burniske said. The Chartway CEO who has been outspoken about the CU’s ambitions in Utah and two weeks ago accused unnamed CUs in that state of being “cry babies” in complaining to the NCUA that Utah CUs were being ignored in the merger process in favor of large East Coast CUs. In countering Burniske, Utah CUs have faulted Chartway’s accounting methods in producing high capital ratios following the mergers of HeritageWest FCU of Tooele and Southwest Community FCU of St. George.
NCUA officials were not immediately available to comment on the Orem conservatorship or on any possible change in NCUA direction on mergers.
Apart from Chartway, it was learned that the $5.1 billion America First FCU of Ogden was also a bidder for Family First as well as a handful of other Utah CUs that were not identified.